ISLAMABAD, June 14: The federal government on Tuesday approved setting up of 100 utility stores and 16 related warehouses to provide subsidised food items to more people and transferred the responsibility of coal-based gas operations to Sindh and other provinces.

The Economic Coordination Committee (ECC) of the cabinet took these decisions on Wednesday.

Prime Minister Shaukat Aziz presided over the meeting that also increased cotton cess to Rs20 per bale from the existing Rs11 per bale.

Dr Ashfaq H. Khan, Economic Advisor to the Finance Ministry, said the government planned to open 440 utility stores in the far-flung areas to provide food items at subsidised rates.

He said the existing number of USC outlets is 560 which will be increased to 1,000 by opening another 440 stores in a phased manner, adding in the first phase, 100 utility stores and 16 warehouses will be established at a cost of Rs233.50 million and the money will be transferred to the USC within a week and will be treated as grant-in aid.

He said the ECC also increased the cotton cess to Rs20 per bale of 170 kg from Rs11 per bale, which will yield Rs108 million in addition to the existing Rs132 million, adding the entire Rs240 million fund will be used in Research and Development of cotton.

The ECC directed the Minfal to prepare a restructuring plan for cotton research institutions within 45 days and give a presentation. It was also asked to prepare hybrid and biotechnology cotton policies as well.

The ECC also transferred powers and functions to regulate coal-based gas to the provincial government of Sindh as well as other provinces under article 146 (1) of the constitution subject to three conditions. First, the provinces will not grant rights to explore and produce coal-based gas over the areas already awarded by the federal government for petroleum exploration and production without the consent of the respective companies on a case-to-case basis.

Second, coal-based gas operations should not hinder petroleum exploration and production activities, and, finally, the centre will have the right to issue licences for exploration and production of petroleum with coal-based-gas-licensed areas.

Coal is a provincial subject and gas is a federal subject under the constitution. The decision will allow the Sindh provincial government to regulate the functions relating to coal-based gas, particularly from Thar Coal. The provincial government has already reported to have signed agreements with the Associated Group of Iqbal Z. Ahmed.