ISLAMABAD: The Punjab government on Monday told the Supreme Court seized with a case relating to shortage of wheat that an abrupt switch from general subsidy to the targeted one might have serious implications for the poor.

“The government has to carefully evolve a system where the poorest of poor are benefited more than the benefit they get through the existing system of subsidy on foodgrains,” said a report submitted by provincial Food Secretary Muhammad Aslam.

Also read: SC upset by lack of food subsidies

Additional Advocate General of Punjab Hanif Khattana also attended the hearing.

A three-judge bench headed by Justice Jawwad S. Khawaja had been insisting that the federal and provincial governments should ensure targeted subsidy on flour instead of general subsidy because the existing system of subsidy would also benefit those who could afford to buy wheat even at higher prices.

Punjab govt submits report on food subsidy in Supreme Court

The court had taken up an application of Jamaat-i-Islami Secretary General Liaquat Baloch on the plight of hapless citizens who are being forced to buy flour at exorbitant prices despite the fact that Pakistan is an agricultural country.

At the last hearing on July 1, the court had asked the provincial food secretaries to come prepared and give undertakings that schemes so devised would be implemented. Otherwise, it warned, the consequences would follow if the undertakings were not executed.

On Monday, the Punjab food secretary said that to determine the number of beneficiaries on a just and equitable basis, the provincial government had signed an agreement with the Benazir Income Support Programme (BISP) and hired the services of some experts. Chief Minister Shahbaz Sharif has ordered formulation of a comprehensive programme of subsidy covering food, enrolment in schools, immunisation and registration through Form-B of National Database and Registration Authority.

A “Khidmat Card” for launching such an initiative had also been envisaged, the report said, adding that the provincial government had advertised for hiring the services of banks for distribution of targeted subsidy.

It said a subsidy of Rs5 billion had been earmarked for Ramazan package and 450,000 metric tons of wheat would be released at subsidised rates. The Punjab government has subsidised only that brand of flour which is mostly consumed by lower income groups. “Other varieties like fine, super and other brands which are preferences of the relatively well-to-do people are available in the open market at competitive prices,” the report said.

It explained that if the provincial government launched any targeted subsidy on the basis of BISP data prepared in 2011-12 (around 2.9 million beneficiaries in Punjab) and to pay Rs1,000 per month to each beneficiary, a huge amount of Rs34.8 million per annum will be required, in addition to the administrative cost. However, when the actual scheme is launched the number of beneficiaries will significantly increase and additional funds would be required on the basis of verified data of beneficiaries.

In order to provide food security to the common man, the Punjab government has purchased 3.7 million metric tons of wheat from growers, in addition to the carry forward stock of 133,000 metric tons. For this purpose the government has raised a loan of Rs205 billion for which it would have to bear an interest of Rs25bn from its own budget.

Additional Advocate General of Khyber Pakhtunkhwa Zahid Qureshi informed the court that the provincial government had increased the targeted subsidy on foodgrains to Rs6.86bn from Rs5bn and formed a committee for its implementation.

KP’s Food Director Mohammad Anwar said the allocation had been made to provide flour and ghee through utility stores during Ramazan.

He said that 850,000 people in KP lived below the poverty line out of a total population of 26 million.

The court adjourned the hearing for Tuesday.

Published in Dawn, July 8th , 2014