ECC extends subsidy on five essential food items till June 30.

ISLAMABAD -- The EcoAnoAAAmic Coordination ComAmittee (ECC) of the Cabinet on Thursday decided to continue a general subsidy on five essential kitchen items until June 30, 2021 and turned down a request of the Utility Stores Corporation (USC) for immediate increaAAse in their prices despite non-utilisation of rolled over funds from the Prime MiniAster's Covid-19 Relief Fund.

The meeting presided over by Finance Minister Abdul Hafeez Shaikh also did not approve for the time being an increase in commission of oil marketing companies (OMCs) and their dealers and a five-year textile and apparel policy.

Informed sources said the USC had proposed increase in the prices of wheat flour, sugar, vegetable ghee, pulses and rice even though it had failed to utilise the Rs50 billion subsidy allocated for provision of essential items to the people. Under various ECC decisions of March and April 2020, 'an amount of Rs35.60bn was granted for procurement and Rs14.4bn for subsidy on five commodities to ensure their availability across the country in order to mitigate the impact of economic slowdown induAced by the Covid-19 pandemic'.

The meeting was also informed that 'Rs10bn had been released which have so far not been utilised' until Jan 1, 2020. The ECC directed the USC and the Ministry of Industries and Production (MoIP) that subsidy should continue until end-June this year and a workable future business plan to provide relief to the people must be presented.

Rejects USC request for hike in prices; defers decision on textile policy, margin of OMCs, dealers

Currently, the price of suAgar at USC is about Rs68 per kg against Rs90-92 in the market while ghee price at USC outlets is about Rs180 per kg - almost Rs60-70 per kg lower than the market. Likewise, the USC is selling wheat flour at Rs800 per 20-kg bag against Rs870 in Punjab and up to Rs1,200 in Karachi.

An official statement said the ECC approved the first proposal of the MoIP 'regarding continuation of general subsidy on five essential items through USC from Jan 1 to June 30, 2021 out of funds allocated under Prime Minister's Relief Package-2020 in the backdrop of Covid-19 pandemic'.

Secondly, the MoIP proposed to approve re-allocation of Rs2.332bn for ERP procurement and IT infrastructure for automation of stock management throughout the network of USCs. The ECC approved in principle, with a direction to hold further consultation with the Ministry of Information Technology and Ministry of Finance...