ECC slashes subsidies on sugar, edible oil and flour

ECC slashes subsidies on sugar, edible oil and flour

ECC slashes subsidies on sugar, edible oil and flour

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Friday reduced the subsidy on three essential food items available in the Utility Stores Corporations (USC) outlets across the country.

The ECC meeting, chaired by Federal Minister for Finance and Revenue Shaukat Tarin at the Finance Division, also approved revision in the prices of three essential commodities, flour (20kg bag) to Rs950, ghee (1kg) to Rs260 and sugar (1kg) to Rs85, respectively, owing to an increase in gap between the subsidised prices offered by the USC and the prevailing market prices.

During the meeting, the Ministry of Industries and Production secretary presented a summary regarding extension in the Prime Minister’s Relief Package 2020, providing subsidies on five essential commodities from July 15, 2021 to September 30, 2021 till the Enterprise Resource Planning (ERP) system becomes fully operational.

By doing this, the cooking oil will become costlier by Rs90/kg, sugar by Rs17/kg and the prices of a 20kg flour bag would go up by Rs150.

The ECC considered and approved a summary, presented by the Ministry of Commerce, regarding the elimination of documents attestation fee for goods imported into Pakistan from Kenya, as this non-tariff measure increases the cost of business and transaction time.


The decision by the committee would facilitate trade between the two countries and enhance Pakistan’s market share in the region.

The ECC also approved a summary tabled by the Power Division regarding non-cash settlement for the power sector re-lent loans against the subsidies payable by the government equal to Rs116 billion.

The meeting also approved the “Kamyab Pakistan Programme”. A flagship programme, which would extend micro-loans to entrepreneurs and farmers under the “Kamyab Karobar” and “Kamyab Kissan” schemes, respectively.

The programme would also provide low-cost housing loans through Naya Pakistan Housing and Development Authority (NAPHDA). The Kamyab Pakistan Programme also includes the ongoing skill development programme for the educational and vocational training under the title of “Kamyab Hunarmand”.

This programme is aimed at extending loans to four million households at the lowest strata, as registered with the National Socio Economic Registry (NSER) of Ehsaas.

Loans worth Rs0.5 million, Rs0.150 million and Rs0.2 million through the microfinance providers for Kamyab Karobar and Kamyab Kissan at zero markup will also be provided.


The third component of the scheme is the introduction of a new tier in Naya Pakistan Low-cost Housing Scheme; wherein, loans worth Rs2.7 million (for NAPHDA) and Rs2 million (for non-NAPHDA) projects will be given at subsidised rates.

The salient features of the Kamyab Pakistan Programme include loan size of Rs150,000 (per crop) for the purchase of agricultural inputs. The commutative disbursement under the programme would be Rs1.6 billion over the period of three years. It would benefit 3,000,000 families.

The ECC commended all the concerned for working out such a detailed programme aimed at “bottom-up approach” for reducing poverty as envisaged by the prime minister.

The finance minister said the consultative process was followed in working out modalities of the Kamyab Pakistan Programme, ensuring that all relevant stakeholders are onboard and micro-loans would be disbursed as per the given criteria.

The ECC meeting also considered and approved the draft policy directives related to the auction of the next generation mobile services (NGMS) in Azad Jammu and Kashmir (AJK) as submitted by the Ministry of Information Technology and Telecommunication before the committee.

This is the first time that the next generation mobile services will be auctioned in AJK and would improve the mobile broadband services in the region.


Moreover, the Economic Coordination Committee also decided that for the payment of the auctioned licence fee, the method in-vogue in the earlier auction processes will be followed.

The Ministry of Maritime Affairs presented a summary regarding the award of engineering consultancy service contract for the upgradation of Port Qasim Authority (PQA), amounting to Rs.86.6 million. The ECC approved the execution of the project.

The meeting allowed the Post Qasim Authority, Karachi Port Trust and Gwadar Port Authority boards to transfer their marine assets to the Pakistan Marine and Shipping Services Company Private Limited (PMSSC), a subsidiary of the Pakistan National Shipping Corporation.

The maximum rates to be charged by the Pakistan Marine and Shipping Services Company from the public sector ports and harbours would be determined from time-to-time by the Ministry of Maritime Affairs through a notification in the official gazette.

The Ministry of National Food Security and Research presented a summary regarding procurement of 200,000 cotton bales by the Trading Corporation of Pakistan (TCP) to promote cotton production and bring stability in the domestic market. The ECC also approved the formation of the Cotton Price Review Committee (CPRC) with the mandate to review the market price and propose intervention on a fortnightly basis.

It also approved a summary by the Ministry of Industries and Production for importing 200,000 tonnes of sugar to build strategic reserves and minimise the role of speculative elements in the domestic market. In case of need, more reserves will be built through imports, the ECC said.


The meeting also approved the amendment in its earlier decision dated February 19, 2021 regarding the “Prime Minister’s Fiscal Package for Agriculture in the wake of the Covid-19 Kharif Season”.

The package offered a subsidy on DAP at the rate of Rs1,500/acre for cotton and rice crops, during the Kharif season 2021. Now according to the amendment, the farmers can avail subsidy on any phosphatic fertiliser according to their choice.

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