ECC approves launch of Ehsaas Targeted Commodity Subsidy Programme

ISLAMABAD – A special meeting of the Economic Coordination Committee (ECC) of the Cabinet on Friday approved the launch of the Ehsaas Targeted Commodity Subsidy Programme worth over 106 billion rupees for the period of six months starting from January next year.

Omar Ayub Khan, Federal Minister for Economic Affairs, chaired a special meeting of the ECC in Islamabad. The ECC has discussed the summary titled “Launch of the Ehsaas Targeted Commodity Subsidy Programme (ETCSP) presented by Poverty Alleviation & Social Safety Division. The total amount of this programme is Rs106.102 billion for the period of 1st January to 30th June, 2022, which includes subsidy for beneficiaries, incentives for Kiryana stores, SMS charges for telecom operators, verification charges to Pakistan Mobile Numbers Portability Database and NADRA, mobilization charges, NBP costs and other operational expenditures. 

It was highlighted that in pursuance of the Cabinet Decisions, extensive efforts were undertaken including field visits, market surveys, and meetings with local shop owners/Tajir associations in dozens of cities across the country. In addition, wide ranking consultations were held with relevant provincial and federal stakeholders. Resultantly, the Program Design Document has been amended to ensure compliance with the cabinet decisions and address the concerns of stakeholders. Further, PASS Division and National Bank of Pakistan have also started mobilization efforts for beneficiaries and merchants registration. 

In order to implement this program, PASS Division will enter into an MoU with NBP for this purpose and will reimburse all relevant costs incurred by NBP on a monthly basis subject to an independent audit and authorization by the Program Steering Committee. PASS Division will hire one of the top accounting firms as an external auditor to review all transactions (subsidy and vendor payments) processed on monthly basis; The three items covered under the program are essential commodities with inelastic demand, therefore, adoption of local prices will be allowed for the disbursement of the fixed per unit subsidy. 

According to the Kiryana Incentive Scheme, target Kiryana Stores are located in communities with average monthly income of less than Rs. 30,000 per family. Hence, 8% of subsidy value as incentive for Kiryana Stores (Rs12/transaction, assuming average transaction value of Rs. 500) will be allowed. 

After due deliberations, ECC of the Cabinet approved the summary of Poverty Alleviation & Social Safety (PASS) Division for launch of the Ehsaas Targeted Commodity Subsidy Programme (ETCSP). 

Special Assistant to Prime Minister on Poverty Alleviation and Social Protection Dr Sania Nishtar recently informed the media that Rashan Program would provide a monthly subsidy of Rs1,000 to 20 million households on three basic food items, including ghee/cooking oil, pulses, and wheat flour. Families earning less than Rs50,000 a month can register themselves under the programme. Only one member of an applicant family whose cell number is issued on his personal Computerised National Identity Card (CNIC) can enroll his family either through 8171 SMS service or the web-portal. 

The Federal Cabinet has approved the criteria that deserving families of foreign travelers and government employees with salaries less than Rs31,500 can also benefit from ‘Ehsaas Rashan Riayat.’ 

A monthly subsidy of Rs1,000 will be granted to every eligible family on the purchase of flour, cooking oil or ghee and pulses. A subsidy of Rs22 per kg will be given on the flour, Rs55 per kg on pulses and Rs105 per liter/kg on cooking oil or ghee at the designated Kiryana shops. 

The government will give subsidy amount and a 5-8% commission to ‘Kiryana’ shopkeepers directly in the bank accounts. This is to encourage them to move from cash-based transactions to electronic dealings, open their bank accounts, and install internet-enabled devices. Lucky draws will also be held every quarter through which prizes like mobile phones, motorcycles or cash prizes would be given to grocery stores owners.