Sindh and Balochistan have stayed away from the Rs120 billion Ehsaas Targeted Commodity Subsidy Programme (ETCSP), which is aimed at removing the untargeted subsidies.
Government servants earning less than Rs31,500 per month are eligible for the relief and people with average monthly phone bills in excess of Rs1,000 can claim the subsidy.
The Poverty Alleviation and Social Safety Division had recommended removal of these categories from the subsidy programme.
However, the cabinet stated that they should also be eligible for the programme by removing or adjusting the exclusion filters.
The Poverty Alleviation and Social Safety Division informed the cabinet in a meeting last week that Pakistan had experienced a marked increase in commodity prices and rates of three major food items had risen 15% within a year.
Although the price increase was driven by price hikes in the international market, controlling inflation remained an important policy objective of the government.
To achieve this policy objective, the government shared plans to launch the Ehsaas Targeted Commodity Subsidy Programme aimed at helping the financially vulnerable groups of society.
The Prime Minister’s Office constituted a steering committee to oversee the design of the project.
The committee had authorised the programme design’s submission to the Economic Coordination Committee (ECC) of the cabinet.
The government may choose to reduce the size of targeted subsidy programme or end it once the current inflationary cycle ended or economic situation improved.
According to the programme design, the selected stores and beneficiaries will go through a rigorous verification process to minimise the incidence of fraud.
Poverty Alleviation Division also sought approval to assign fiscal management and oversight of the program to the Ministry of Finance.
The non-receipt of consent from Sindh and Balochistan to join the program was also discussed in a cabinet meeting. It was apprised that lack of response from Balochistan was probably due to recent change in the government, whereas, the position of Sindh was unclear.
Published in The Express Tribune, November 9th, 2021.