Ramazan package to be announced today

Minister for Industries and Production (MoI&P) Ghulam Murtaza Khan Jatoi is to announce Ramazan Relief Package 2016 on Wednesday (today) according to which subsidy of Rs 1.4 billion will be extended on 18 items to be available at USC outlets across Pakistan during the holy month of Ramazan.

Sources close to Secretary Industries revealed that the implementation on Ramazan relief package will commence from June 1, 2016, the day, employees get salaries.

However, the package would be reviewed in the middle of Ramazan by the Economic Co-ordination Committee (ECC) of the Cabinet.

Minister for Planning, Development and Reforms, Ahsan Iqbal, sources said, has expressed reservations at the consistent trend in increase in prices of essential items, in contrast to what is happening in the developed world. He also cited the usual hike in prices of essential food items during Ramazan.

Giving the details, sources said, the Ministry of Industries and Production informed the ECC that demand for essential commodities like wheat, flour, Ghee/ oil, sugar, pulses, gram flour, dates, tea, squashes, syrups, spices and milk generally rises during Ramazan each year for a variety of reasons. USC has successfully conducted the Ramazan Relief Packages announced by the government since 1991.

The relief package provides not only the much needed economic relief to consumers but also helps stabilise prices in the open market. The Ramazan packages approved by the ECC for 2014 and 2015 were of Rs 1.448 billion and Rs 1.5 billion respectively. The government will extend subsidy on 18 essential items through the USC outlets.

The subsidy on Atta will be Rs 4 per kg, sugar, Rs 5 per kg, Ghee/ edible oil, Rs 8 per kg whereas subsidy on all kinds of Dalls, white gram, black gram, dates, rice sela and broken rice will be Rs 10 per kg.

The amount of subsidy on squashes & syrups (1,500ml) will be Rs 10 and squashes and syrups (900 ml). Subsidy on black tea will be Rs 50 per kg, milk (tetra Pak), Rs 10 per litre and spices, Rs 10 per kg.

The Ministry of Industries and Production stated that in addition to the proposed subsidy, USC would also reduce prices of more than 1,000 food and non-food items under different brands from 5 per cent to 10 per cent by obtaining special discounts from venders/suppliers and reducing USC’s own profit margin by up to 10 per cent so as to provide relief to consumers.

It was further stated that subsidy claims for 2014 & 2015 amounting to Rs 2.622.146 billion duly verified and audited by a firm of Chartered Accountants were submitted to the Ministry of Finance.

Ministry of Industries also stated that an extensive publicity campaign would be required for creating awareness among the masses about the Ramazan relief package 2016 which would involve an estimated amount of Rs 10 million to be met from USC’s resources.

During the presentation to the ECC, the Ministry of Industries and Production stated that they had submitted the summary for the Ramazan relief package on May 11, 2016. However, in the meantime, the sponsoring Ministry/ USC had reviewed the Ramazan package.

The Ministry proposed to include four additional items in the package viz (i) black gram; (ii) broken sella;(iii) Mash Dal and ;(iv) Masoor whole. The Ministry of Industries and Production also revealed that under directions of the Prime Minister, USC was maintaining prices of 11 items at pre-27 April, 2016 level despite higher purchase prices and higher prevalent market prices.

The Ministry/ USC stated that an amount of Rs 921.13 million was required as subsidy for maintaining these prices between April 27, 2016 and Eid-ul-Fitr. The MoI&P maintained that an amount of Rs 659 million could be adjusted from the proposed Ramazan package as eight items of the proposed package did not need further reduction in Ramazan.

Hence, an amount of Rs 579 million could be adjusted in lieu of these items. Moreover, Rs 80 million could be adjusted by reducing equivalent quantity of Atta. The MoI&P stated that subject to the adjustments, an amount of Rs 1.67113 billion would be required for Ramazan package-2016 including an additional amount of Rs 262.13 million.

The MoI&P submitted the following proposals for the consideration / approval of ECC: (i) approval of the Ramazan relief package 2016 with a subsidy of Rs 1.67113 billion ;(ii) release of arrears of subsidy of previous years’ Ramazan relief package 2014 and 2015 duly audited amount of Rs 622.146 million; and (iii) inter-item adjustments of subsidy amounts and quantities to optimise the commodity mix in the relief package sales.

The Minister for Planning, Development and Reforms, Ahsan Iqbal pointed out that price stabilisation of basic food items in the country was very essential. He said that prices of food items remained unchanged for a longer period of time in the developed countries whereas the situation in Pakistan on this account was quite different especially in Ramazan whereas prices of all food items including fruits are raised by vendors without justification thereby keeping these items out of the reach of common people.

He termed this price escalation as a seasonal jerk, and emphasised the need for a scientific study to assess the demand pattern of essential food items in the country so that efforts could be made for price stabilisation.

Chairman ECC, Senator Ishaq Dar endorsed the views of Planning Minister and said that Ramazan relief package 2016 was required to be reviewed in the middle of Ramazan to ascertain the actual demand of food items.

He directed the Ministry of Industries and Production to put up a summary to the ECC on 10th of Ramazan for reviewing the package in light of actual demand of food items during the month of Ramazan.

He further advised that the quantity of Atta proposed in the Ramazan relief package should remain unchanged and the proposed reduction in the subsidy amount of Rs 80 million due to reduction in the quantity of 20,000 tons of Atta which will be part of the overall subsidy.  –Business Recorder