1
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Thursday decided to continue a general subsidy on five essential kitchen items until June 30, 2021 and turned down a request of the Utility Stores Corporation (USC) for immediate increase in their prices despite non-utilisation of rolled over funds from the Prime Minister’s Covid-19 Relief Fund.
The meeting presided over by Finance Minister Abdul Hafeez Shaikh also did not approve for the time being an increase in commission of oil marketing companies (OMCs) and their dealers and a five-year textile and apparel policy.
Informed sources said the USC had proposed increase in the prices of wheat flour, sugar, vegetable ghee, pulses and rice even though it had failed to utilise the Rs50 billion subsidy allocated for provision of essential items to the people. Under various ECC decisions of March and April 2020, “an amount of Rs35.60bn was granted for procurement and Rs14.4bn for subsidy on five commodities to ensure their availability across the country in order to mitigate the impact of economic slowdown induced by the Covid-19 pandemic”.
The meeting was also informed that “Rs10bn had been released which have so far not been utilised” until Jan 1, 2020. The ECC directed the USC and the Ministry of Industries and Production (MoIP) that subsidy should continue until end-June this year and a workable future business plan to provide relief to the people must be presented.
Rejects USC request for hike in prices; defers decision on textile policy, margin of OMCs, dealers
Currently, the price of sugar at USC is about Rs68 per kg against Rs90-92 in the market while ghee price at USC outlets is about Rs180 per kg — almost Rs60-70 per kg lower than the market. Likewise, the USC is selling wheat flour at Rs800 per 20-kg bag against Rs870 in Punjab and up to Rs1,200 in Karachi.
An official statement said the ECC approved the first proposal of the MoIP “regarding continuation of general subsidy on five essential items through USC from Jan 1 to June 30, 2021 out of funds allocated under Prime Minister’s Relief Package-2020 in the backdrop of Covid-19 pandemic”.
Secondly, the MoIP proposed to approve re-allocation of Rs2.332bn for ERP procurement and IT infrastructure for automation of stock management throughout the network of USCs. The ECC approved in principle, with a direction to hold further consultation with the Ministry of Information Technology and Ministry of Finance for smooth implementation.
Furthermore, it was decided that USC would present a revised proposal after working out a specific percentage range(s) of differential from market prices for subsidising essential commodities through the MoIP before next ECC meeting. The percentage ranges would serve as a benchmark for subsidising the essential commodities through USC, keeping in view, fluctuations in international commodity prices.
On the Textiles and Apparel Policy 2020-25 by the Ministry of Commerce, the ECC decided to include Special Assistant to the PM on Power Tabish Gauhar in the sub-committee for detailed consultation on proposals related to the power sector which fall under the ambit of the Textile Policy. The Textiles and Apparel Policy 2020-25 would be presented before ECC in a couple of weeks.
On a summary of the Petroleum Division for increase in margins on sale of petroleum products to OMCs and Dealers, the ECC decided that proposed rates for the increase would be considered after a detailed study by Pakistan Institute of Development Economics (PIDE). The committee expressed displeasure that it had directed the Petroleum Division to have an independent study before the increase in margins about a year ago but same summary had been repeated without the study.
The ECC, therefore, constituted a sub-committee led by SAPM on Revenue Dr Waqar Masood and comprising Tabish Gauhar, Minister for Planning Asad Umar and SAPM on Petroleum Nadeem Babar as its members to evaluate the outcome of the PIDE study and present a revised summary before the committee accordingly.
The ECC approved a summary of the Power Division regarding Implementation Agreement, Supplemental Agreement and Power Purchase Agreement for 300 MW Coal Power Project at Gwadar.
Secretary Ministry of Religious Affairs and Interfaith Harmony presented the Zaireen Management Policy before ECC for consideration. The underlying rationale of the policy is to regulate, streamline and provide better facilities to Zaireen for performing religious obligations in an organised manner.
Published in Dawn, January 29th, 2021
