Sindh mulls Rs3bn cash subsidy for eight million poor

06 Aug 2014


A Pakistani worker prepares bags of wheat flour. AFP file photo
A Pakistani worker prepares bags of wheat flour. AFP file photo

KARACHI: Acting on the directives of the Supreme Court of Pakistan, the Sindh government is considering introducing a Rs3 billion cash subsidy for an estimated eight million poor people living in 24 districts of the province, it emerged on Tuesday.

The targeted subsidy, to be given to the poor from the next financial year, would be in addition to the existing Rs4.6bn general subsidy, as the government believed that ending it would likely increase the flour price in the province.

The Supreme Court had taken notice of “enormous increase in the cost of living”, particularly the deaths of malnourished children in Sindh’s Tharparkar area and other incidents of collective suicide by families suffering from poverty and hunger.

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The apex court believed that the state had failed to discharge its responsibilities under Articles 9, 14 and 38 of the Constitution.

The judiciary demanded to know as to how the state i.e. the federal and provincial governments would ensure that every citizen in the country lives a “life free of hunger and destitution”.

Sources told Dawn that Sindh Chief Minister Syed Qaim Ali Shah had held a meeting on July 11 to discuss the apex court’s directions in detail.

They added that the participants of the meeting were informed that “any change in the existing procedure of subsidy prevailing for decades as a ‘general subsidy’ would hamper the existing mechanism and consequently increase the flour prices exorbitantly high, which may not be sustainable at this stage”.

Therefore, it was decided that the provincial government would strive hard to evolve a strategy under the development scheme to implement the order of the apex court in letter and spirit and sought ample time to collect data for its feasibility to devise a fresh mechanism for the targeted subsidy to the vulnerable segment of the public in consultation with other stakeholders.

It was decided that the provincial government would introduce a cash subsidy for purchase of atta (flour) for the targeted group from July 1, 2015.

It was proposed that this scheme would be launched from the financial year 2015-16, as in the current year the government had already committed a subsidy to the volume of Rs4.6bn so as to maintain the stability of atta at a reasonable rate within the reach of the common man across the province.

This proposal was submitted before the SC on July 17. The court, however, did not accept the proposal and observed that a timeframe should be given to solve the issue of ensuring food security/availability.

The apex court further observed that the affordability of flour was not entirely dependent on the “availability factor”. It believed that affordability primarily depended on economic activity in the country, which has remained stagnant in recent years mainly because of a shortage of energy. “Recent indicators show that economic activity is gaining momentum and most of the economic indicators have started moving in the right direction.”

The court while referring to the report presented by the additional advocate general, Sindh observed that it showed that “the amount of subsidy has been substantially increased but what the government of Sindh intends to do in future has not yet appeared in black and white”.

Referring to a lot of paperwork and no consequent benefit to the poor in terms of provision of basic necessities, the apex court observed that “even we feel that a lot has been done on papers but unless the benefit of what has been done on papers and on the factual plain reaches the poor people we would stay unsatisfied because such measures could only be appreciated from their effect”.

It added, “Unless the effect of the proposed and actual measures is felt by the people by and large, the alleged measures would remain abstract.”

The sources told Dawn that following these directions of the apex court, the chief minister held a meeting again on July 24 and deliberated on the proposed targeted subsidy worth Rs3bn to the vulnerable and protect the poorest segment of population.

It was pointed out that there were around eight million poor people living in 24 districts of the province, who would benefit under this scheme. However, it was suggested that a major share shall be transferred to the rural areas ensuring 100 per cent targeted subsidy to the poorest of the poor.

This cash subsidy on flour would be given to those already registered under the Benazir Income Support Programme and Zakat Mustaheqeen whose number was stated to be eight million in the province. Total population of Sindh was estimated to be 42m, which means that this subsidy would likely benefit 25pc population of the province, according to one senior official familiar with this scheme.

It was proposed in the meeting that for presenting a comprehensive programme that could satisfy the court, the assistance of other departments should also be sought.

Thus, the meeting decided to set up a high-level body to submit a “comprehensive programme” within two weeks, which would likely be presented before the apex court on August 20.

The committee would be led by the additional chief secretary (planning and development) and its members included secretaries of the finance, food and agriculture departments.

The terms of reference of the committee would be preparing a timeline regarding implementation of the plan, detailing the number of persons to be benefited, mode of proposed project/plan and involving the poor people in the targeted subsidy, the sources said.

Published in Dawn, August 6th, 2014