ECC approves Rs106.1 billion for Ehsaas subsidy programme

ISLAMABAD: The government has approved Rs106.1 billion Ehsaas Targeted Commodity Subsidy Programme (ETCSP) to uplift the low-income segment of the country.

The Poverty Alleviation and Social Safety (PASS) division presented the programme in a meeting of the Economic Coordination Committee (ECC) of the Cabinet chaired by the Federal Minister for Economic Affairs Omar Ayub Khan.

The total amount of this programme is Rs106.1 billion for a period starting from January 1 to June 30, 2022.

The subsidy programme includes subsidies for beneficiaries, incentive for kiryana stores, SMS charges for telecom operators, verification charges to Pakistan mobile numbers portability database and Nadra, mobilisation charges, the National Bank of Pakistan costs and other operational expenditures.

It was highlighted during the meeting that in pursuance of the cabinet decisions, extensive efforts were undertaken including field visits, market surveys, and meetings with local shop owners and Tajir associations in dozens of cities across the country.

In addition, wide ranking consultations were held with relevant provincial and federal stakeholders. The program design document has been amended to ensure compliance with the cabinet decisions and address the concerns of stakeholders.

Furthermore, the PASS division and the National Bank of Pakistan have also started mobilisation efforts to register beneficiaries and merchants.

In order to implement this programme, PASS division will enter into a memorandum of understanding with the NBP, and reimburse all relevant costs incurred by the NBP on a monthly basis subject to an independent audit and authorisation by the Programme 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 a monthly basis.

The three items covered under the programme 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 Rs30,000 per family. Hence, 8 per cent of subsidy value as incentive for kiryana stores (Rs12 per transaction, assuming average transaction value of Rs500) will be allowed.

After due deliberations, the ECC of the cabinet approved the summary of the PASS division to launch the Ehsaas Targeted Commodity Subsidy Programme.