Govt ends subsidies on essential food items at USC

Rawalpindi:On the directive of the federal government, the Utility Stores Corporation (USC) has discontinued all subsidies on essential food items. Previously, the federal government provided subsidies on five key staples including flour (atta), ghee, sugar, pulses, and rice, offering some relief to the impoverished segments of society. However, on Wednesday, this relief was abruptly withdrawn, leaving the public in a precarious situation.

The most vulnerable segment of society, those under the Benazir Income Support Program (BISP), has also been deprived of all subsidies. The impact of this decision is evident in the steep price increases at utility stores. Previously, 1 kilogram of subsidized ghee was sold at Rs380, but the current price is Rs450. A 10-kilogram bag of subsidized flour, which was previously sold at Rs648, is now priced at Rs1,500. Similarly, 1 kilogram of subsidized sugar, which used to cost Rs109, is now being sold at Rs160. The price of 1 kilogram of subsidized rice has increased from Rs320 to Rs340, while the prices of pulses have also surged. Subsidized Daal Chana was priced at Rs240, but now it is being sold at Rs260. The price of 1 kilogram of subsidized Daal Moong has risen from Rs310 to Rs330, and the price of 1 kilogram of subsidized white channa has increased from Rs355 to Rs380.

Anayatullah Dola, Senior General Manager (Media) of the USC, confirmed to 'The News' that the government has ordered the cessation of all subsidies on essential items. He mentioned that the USC is striving to provide maximum relief to the public, holding meetings since the morning to explore options. However, he also noted that the federal government remains firm on its decision to end all subsidies. "We are making every effort to reinstate the subsidies," he stated. He further added that the USC will now purchase flour directly from flour mills at lower prices, intending to sell flour bags at rates comparable to those in open market shops.

Once a beacon of hope for the poor, the USC now offers no significant price difference compared to open market shops. Tayyaba Naveed, a housewife, shared her disappointment, stating that when she went to a government-run store to purchase 1 kilogram of subsidised ghee, she was shocked to find the price had risen to Rs450 from Rs380. "I was shocked and asked why they were selling ghee at higher prices. The USC staff informed me that the government had ended all subsidies on food items. I had to return without buying ghee because I didn’t have enough money," she said.

Muhammad Nawaz, another citizen, expressed his frustration, saying that the federal government has completely failed to provide relief to the people. "The government has taken away all forms of relief and left us in a dire situation. How we will survive in this situation, only God knows," he lamented.

Reportedly, the Economic Coordination Committee (ECC) of the Cabinet has approved the disbursement of a higher rate of monthly subsidies to the USC per household, along with a turnover tax set at 1.25 per cent on the USC. During a meeting presided over by Finance Minister Muhammad Aurangzeb, the ECC also approved a request from the Ministry of Industries & Production to designate the warehousing and logistics sector as an industry.

The meeting was informed that Rs60 billion had been allocated in the 2024-25 budget, including Rs50 billion under the Prime Minister’s relief package and Rs10 billion under the Ramazan relief package.