ISLAMABAD: People having a household income of less than Rs40,000 will get a monthly stipend of Rs2,000 under the new government subsidy scheme, the country’s finance czar announced on Saturday as the people continue to battle skyrocketing inflation.

“I urge people with household income below Rs40,000 to send us their computerized national identity card (CNIC) number to phone number ‘786’ in order to avail the subsidy. We are following the Benazir Income Support Program (BISP) system. We will verify their details and provide them with the Rs2,000 monthly stipend under the scheme,” Finance Minister Miftah Ismail said at a press conference in Islamabad.

‘Sasta petrol, sasta diesel scheme’

The government has launched ‘sasta petrol sasta diesel scheme’ for 14 million households. This means roughly 804 million people or one-third of the country’s population. Each household will be provided a monthly stipend of Rs2,000. It will cost the government Rs28 billion. The targeted group also include BISP recipients that number 7.3 million.

“If we exclude the BISP beneficiaries from the 14 million households, then we have 6.7 million people. Those are not getting the money should send us a message and will give them the money,” Miftah said. “People whose poverty score is less than 37% will be given the stipend,” he said. Under the scheme, the BISP recipients will be provided financial assistance within the next two to three days.

Miftah also urged women heaidng households to message or call on 786 to avail the subsidy, which will start from June 1.

Moreover, the government is also providing “five per cent discount on petrol to households with monthly income of Rs40,000. Eight per cent discount will be provided to households with monthly income below Rs40,000”. Approximately, a Pakistani spends five per cent of his income on transport.

Fuel impact

Miftah said that Prime Minister Shehbaz Sharif’s Friday night address was well-received by the people and, unlike his predecessor, the country’s chief executive did not use “I” in his address, like his predecessor.

He admitted that the decision to increase fuel prices has caused inflation. But inflation would have further increased and the rupee could have further devalued if the government continued to provide the fuel subsidy. He defended the decision citing the recovery mounted by the stock market and appreciation in the value of the Pakistan rupee against the dollar.

Pakistan uses around Rs20 million litres worth of petrol and diesel. The Rs30 per litre reduction on subsidy will reduce the loss by Rs60 billion. Moreover, 40% of rich households use 85% of the fuel, according to the petroleum ministry data.

To a query, Miftah said that he was oblivious to any reports pertaining to further increases in the fuel prices on June 1. He said any such decision would be taken after Oil and Gas Regulatory Authority’s (Ogra) summary. He added that the government has not received any summary pertaining to the increase in electricity tariff.

Budget

The budget would be presented on June 10, announced the finance minister and said the details would be presented on the day of the presentation.

IMF loan

Pakistan is hopeful that the staff-level agreement with the IMF would be completed in June after which the loan amount would be released, the finance minister stated.

“IMF will give $3 billion. We have requested them to extend the programme by a year and expand it by $2 billion,” he said.

Miftah said that he expects the IMF to agree to increase it to $5 billion. “And, if it’s not $5 billion we will have $4 billion.”

Once the agreement with the international lender is finalised, it would pave the way for receiving loans from other multilateral organisations, including the World Bank ($8.9 billion) and ADB, he added.

“The country would have defaulted because of the reduction of petroleum prices by the previous government,” he said, sharing that the subsidies were costing thrice the amount required for running of the entire civil government.

Ismail said that Saudi Arabia was “willing to help us more” but he would share the details in July.

“We have lost political capital [because of the price hike] but the prime minister and [Defence Minister] Khawaja Asif explicitly said that if we have to choose between the political capital and the state, we will choose to save the state,” he said, “We will have political capital and handle political pressure.”

Import items

The import of chocolates was not banned. But, if “private people” or professionals locally called khepias (professional mules) bring a large number of chocolates or perfumes during several visits, then it is banned.