Govt to save Rs4.5billion by abolishing Haj subsidy

ISLAMABAD: The government has admitted that total burden on national exchequer owing to Haj subsidy was Rs4.5 billion which was saved as a result of the government decision to charge full price from pilgrims.

Talking to The News, Federal Minister for Religious Affairs and Interfaith Harmony Noorul Haq Qadri said the government has withdrawn Rs4.5 billion financial assistance which it was paying as subsidy for the pilgrims. Major chunk of Haj’s inflated price is due to rupee devaluation and VAT imposed by the Saudi government, he said.

This year 184,000 Pakistanis will perform Haj rituals out of which 107,000 will go on government quota whereas the remaining will perform this religious ritual on private quota, informed the minister.

The previous government was paying Rs42,000 subsidy on each pilgrim which put an additional burden of Rs4.5 billion on national exchequer. Keeping the current financial situation of the country, the Federal Cabinet has decided to withdraw this subsidy, he said.

While briefing about the increase in Haj prices, the federal minister informed that each pilgrim has to pay Rs63,000 extra due to rupee devaluation. Similarly, Rs17,000 have been increased in the airfare and Rs45,000 have been increased as the Saudi government has increased the prices of accommodation, transportation and meals. The Saudi government has levied 5 percent Value Added Tax (VAT) due to which each country has to pay additional 1200 Saudi Riyals per pilgrim, informed the minister.

“Pakistan’s Haj expenditure are still the lowest in the region if you count it in US dollar as India, Bangladesh, Malaysia and Indonesia are charging more in term of US dollars. My ministry had proposed that the subsidy should not be abolished but the Federal Cabinet decided against it”, commented the minister.

When asked about the criticism on government for increasing the Haj prices, the federal minister said some political elements are politicising this issue otherwise many people are endorsing the government’s decision.

The minister was asked whether the government will take up this issue with Saudi Crown Prince Muhammad Bin Salman in his upcoming visit to Pakistan, he said the government will highlight this issue but it is unlikely that Saudi government will review the Haj prices.

“It will be difficult for the Saudi government to review the Haj prices for Pakistani nationals only. The other countries will demand for the same relaxation. Hence, it will be difficult for the Saudi government to review its Haj policy only for one country”, commented Mr Qadri.

Last week, the federal government increased Haj prices up to 60 percent putting an additional burden of up to Rs156,000 on each pilgrim. This decision sparked a debate whether Islam allows a subsidised Haj or not. The political leaders of opposition parties criticised the government for abolishing subsidy and increasing Haj price.

Former Finance Minister Miftah Ismail raised question on government’s decision of increasing Haj price. According to him, the cost of Haj in 2018 was Rs283,050. The cost of Haj should not be more than Rs387,660 even after adding the rupee devaluation and Rs40,000 subsidy given by the PML-N government.

“The cost of Haj in 2018 was Rs283,050. In 2019 it’s Rs436975. Even if you add Rs40,000 subsidy given by PML-N and add 20 percent devaluation, the cost should be Rs387,660. This is Rs4,9315 (or 17 percent) more. Hajis will pay Rs9 billion more this year! Corruption, incompetence or just Tabdeeli?” tweeted Miftah Ismail.