Pakistan has made commitment to the International Monetary Fund (IMF) that it is aiming to increase spending on the Benazir Income Support Programme (BISP) to 0.4 percent of Gross Domestic Product (GDP) on an annual basis, reveals the IMF country report. According to the report, the IMF supports Pakistan's commitment to expand the social safety nets and reduce poverty in Pakistan.
Pakistan, it says, will strengthen BISP and social assistance programmes by taking the following steps: protecting the most vulnerable from the impact of adjustment policies by providing a one-off disbursement of Rs 1,000 to existing BISP beneficiaries by end-August 2019; making the disbursement of stipends more efficient by signing new banking contracts and, in parallel, launching the "one woman one account" initiative that will ensure financial and digital inclusion of around 6 million women by end-October 2019; boosting girls' educational enrolment by augmenting the BISP-provided Waseela-e-Taleem programme with a girl bonus of Rs 250 to be regularly provided on a quarterly basis (end-December 2019); finalising the update of the National Socio-Economic Registry (NSER) by end-June 2020; following completion of the database, the federal government will increase the amount of cash transfers from the current Rs 5,000 and will seek ways to index benefits; and launching of new programmes under BISP such as the graduation programme and a programme on nutrition.
The BISP, working with international partners, is responsible for the implementation of social assistance programmes through their conditional and unconditional cash transfer programmes, currently reaching over 5 million families, the document reads. The IMF document says, the recently introduced Ehsaas Programme is Pakistan's main poverty reduction strategy, aimed at reducing inequality, supporting the economic empowerment of women, and lifting areas where poverty is higher.
The IMF country report terms poverty reduction as the cornerstone of the federal government's commitments to the people of Pakistan. "Despite considerable progress over the past two decades, Pakistan's poverty headcount remains high. We are determined to make significant headway in eradicating poverty by strengthening and broadening our safety nets. To this end, we have established Ehsaas as our main poverty reduction and safety nets programme. We will use the BISP to implement many of these initiatives," the report quotes Pakistan's commitments made before IMF.
The document says Pakistan's immediate commitments include: to protect the most vulnerable from the impact of IMF's adjustment policies, it will issue by July 15, 2019, a government directive to provide a one-off disbursement by end-August 2019 in the amount of Rs 1,000 to existing BISP beneficiaries; finalising the new banking contracts for stipend disbursements and launching financial inclusion programme for women by end-October 2019; updating the benefit structure of Waseela-e-Taleem (WeT) to narrow the educational gender gap; for boosting girls' educational enrolment, the federal government will work with development partners and modify by end-December 2019 WeT's structure by providing a girl bonus of Rs 250 to be regularly provided on a quarterly basis. The government will have 35 percent of the estimated household caseload surveyed, quality assured and validated with NADRA database by end- December 2019. It will aim to expand BISP cash transfer coverage under a progressive design.
Following completion of the database, the federal government will permanently increase the amount of BISP cash transfers from the current Rs 5,000 at least with the rate of inflation, but ideally more than that, for families that continue to be eligible. Thereafter, the government will seek to maintain the real value of BISP's stipends through an adequate and fiscally sustainable indexation mechanism. Other commitment included launching of BISPS's graduation programme in line with ongoing donor support and agreements to provide greater employment opportunities for those receiving cash grants.
According to the IMF document, to ease the impact of the adjustment on the most vulnerable, the federal budget 2019-20 contains a significant increase in social safety net spending in Pakistan. Allocations to the BISP, the main and best-regarded social assistance programme at the federal level, will be increased by 80 percent on an annual basis. Moreover, the budget contains an additional Rs 50 billion in subsidies to insulate the poorest households from increases in power tariffs.