PM’s food subsidy program: A historic initiative to ebb away inflation

PM's food subsidy program: A historic initiative to ebb away inflation

By Fakhar Alam

PESHAWAR, Nov 07 (APP):The coronavirus pandemic have killed over 5.04 million people while inflicting billions of dollars losses to the economies, food, tourism, hospitality industries and petroleum exports worldwide.

Following lifting of the COVID-19 restrictions, the grim situation in most parts of the world and regional countries including Pakistan have returned to normalcy with a massive increase in the consumption and prices of petroleum and oil products in recent times.

“The pressing demands of people for petroleum viz-a-viz oil products and a record increase in its prices at international markets have left the government with no option but to enhance its prices to bridge the supply-demand gaps,” said Professor Dr Muhammad Naeem, Economics Department, University of Swabi while talking to APP. He said the sharp increase in global petroleum prices from $45 to $85 dollar has also made an adverse effect on Pakistan mostly imported petrol, palm oil, and pulses from abroad and GULF.

“The oil prices in global market had increased by 100% but only 33% of burden was shifted in our country,” he added.

Despite heavy spending on oil exports and difficult economic situation, he said Pakistan had the lowest rate of petroleum at Rs145 per litre among the importing countries compared to India at Rs 250 and Bangladesh at Rs 200 per litre. He said inflation was often linked with increase in petroleum prices which was unfortunate, adding that inflation was an international issue and not Pakistan specific.

A substantial inflation has been witnessed in world where prices of commodities grew by 50% in a year against just 9% in Pakistan, he added. Turkey, US , China and Germany is facing highest inflation, he said, adding gas prices surged by 116% in US, 300% in Europe but Pakistan made no increase except for the one being imported.

Dr Naeem while referring to the Asian Development Bank’s recent report said the premier institution projected the highest rate of inflation in South Asian countries including 6.2% in Bhutan, 5.8% in Bangladesh, 5.2% in Nepal, 7.5% in Pakstan and 4.8% in India in 2021-22.

The global hunger is expected to affect an additional 291 million people in 2021 in Asia, of which 72% would be in developing Asia, particularly in Bangladesh, India, Indonesia and Pakistan, he said while referring to the report. He underscored the need for tight monetary and fiscal policies, increasing text revenue, textile exports, energy and gas production to arrest the growing inflation and price hike.

To counter the rising inflation and price-hike, Prime Minister Imran Khan has recently announced a historic “food subsidy package” worth Rs 120 billion providing 30 percent discount on ghee/cooking oil, flour and pulses to support 130 million people i.e. 60pc population of Pakistan including those registered under the Ehsas Kifalat Program for six months.

Under the landmark package, Rs1,000 subsidy would be provided on flour, pulses and ghee/cooking oil to each of the 20 million families every month. He said this was landmark package can easily be implemented on the basis of solid and authentic data of the government Ehsaas program.

The households having poverty score of less than 39 and an income of Rs. 31,000 per month would be benefited. A web portal for registration of families under the new initiative of Ehsaas Rashan Program would commence operations from November 8. The beneficiaries would be identified with the help of new Ehsaas National Socio Economic Registry (NSER) Survey.

“Those who want to get benefit from this program must have their valid registered mobile numbers with their Computerized National Identity Card (CNIC). The registered buyers will be able to purchase Rashan from the designated kiryana or utility stores on 30 percent subsidy after issuance of Rashan cards to them,” officials of the Ehsas Program told APP.

Eligible people’s list will be displayed within three or four weeks after completion of scrutinizing process with the help of Ehsaas database while the Kiryana stores would be registered meanwhile. A digitally enabled mobile point of sale system in collaboration with National Bank of Pakistan (NBP) has been developed to serve beneficiaries through a network of kiryana stores nationwide.

“Kiryana merchants would be required to downloading the relevant app on their android phones, enter CNIC numbers of the customers and pass on the benefits after authentication mmediately.” Kiryana merchants having a valid bank account to receive the subsidy amount from any corner of the country would be eligible to register after physical verification.

The small Kiryana stores in rural areas will be encouraged to be a part of this initiative and an accelerated drive to be launched for the awareness and education of merchants. The government will also give profit to the registered merchants on the subsidy amount to encourage them serve maximum people.

The customer will receive a verification code which would be entered by Kiryana merchant in the app. Such system has been developed to prevent misuse and corruption. The government employees having less than 31,000 PM income are eligible to apply while those who travel abroad for job purposes would not be excluded as per the cabinet decision.

The provincial governments will contribute 65 percent budget and 35 percent by Federal Government in the Rs120 billion PM’s food subsidy program. The package is apart from the ongoing different programs under Ehsaas Initiative worth Rs 260 billion of the Government. The Government had given Rs 30 billion loan to 22,000 businesses under Kamayab Jawan Program featuring provision of six million scholarship and stipends to students.

Mohibullah Khan, Provincial Minister for Agriculture told APP that PM’s food subsidy program was landmark initiative that would provide direct relief to over 130 million people. He said 10,000 metric tons sugar have been imported through Karachi Port that would be shortly distributed on Rs90 per kilogram among people.

The Minister said about 1,000 to 1,500 ton sugar would be provided to each district on daily basis in order to stabilize sugar prices. The minister said the deputy commissioners have been directed to launch crackdown against elements involved in sugar hoarding.

The subsidized wheat flour is available at Rs1100 per 20kg in market and the district administration is regularly monitoring to ensure implementation of flour prices fixed by the government, he concluded.