Islamabad: Prime Minister Imran Khan will today (Tuesday) chair a federal cabinet meeting to introduce Rs15 billion package for providing relief to consumers from inflation.
The cabinet will consider diverting Rs15 billion from the Ehsaas Programme allocation towards providing subsidies to consumers. The relief will be provided through the Utility Stores Corporation (USC) by diverting Rs15 billion.
The direct subsidies might utilise Rs40 to 50 billion through direct and indirect intervention going to be approved by the cabinet today. The government has also revived the Special Focus Group on essential food items under the jurisdiction of the Ministry of National Food Security & Research with the mandate to develop the Management Information System (MIS) in order to plan and coordinate demand and supply of 15 to 20 essential food items.
The prime minister has revived the Special Focus Group to ensure foolproof supply of food items. Thereare reports that some flour mills owned by close political allies of the government were allegedly found involved in smuggling of flour in guise of Maida and Suji.
The government had allocated Rs191 billion for the Ehsas Programme but so far the utilization stands at Rs50 to 60 billion.
The government possessed cushion to divert these resources for providing relief to consumers against the price hike as CPI-based inflation touched new heights and stood at 14.6 percent for January 2020. Now the economic ministries as well as State Bank of Pakistan are projecting that the inflation would start receding and might come below 13 percent from February 2020.
“The PM might also direct law enforcing agencies to crack down on the hoarders of wheat and sugar stocks,” said the official sources adding that the Monetary and Fiscal Coordination Board would also meet soon to focus on taking steps taming inflationary pressures through the coordinated efforts.
Meanwhile, Prime Minister Imran Khan Monday denied reports about removal of his Adviser on Finance Dr. Abdul Hafeez Sheikh and SBP Governor Reza Baqir.
The prime minister made it clear during a meeting of the government spokespersons he presided over here to review the latest political and economic situation and how to more effectively combat the opposition’s propaganda.
It was learnt that the prime minister emphasised that there was no truth absolutely in media reports that the adviser on Finance and SBP governor were being removed.
He also reiterated his resolve and commitment not to spare those behind the recent flour wheat crisis and the increase in price of sugar in the country in recent days.
The prime minister has already ordered investigation into the flour-whet crisis and factors behind surge in sugar prices. He also announced to go to any extent to provide relief to the common man.
It was decided that the prices of flour, ghee, pulses, rice and others edibles will be subsidized and the district administration would ensure implementation of the relief package. It was also decided to provide subsidised flour to 50,000 registered tandoors.
In tweets on Sunday, the prime minister said the cabinet meeting on Tuesday would decide about measures with regards to giving relief to the masses in relation to essential commodities.
Meanwhile, the Ministry of Finance in an official statement issued Monday said the economic policies and economic reforms programme of the government being implemented with the support of IMF were based on sound and well-established principles of good economic management.
“The objective of these policies is stabilization in the first phase, followed by rapid, sustainable and inclusive growth,” says the Finance Division in response to certain news reports insinuating that the “IMF policies [are] leading to destruction of economy”.
The Finance Division has maintained that the government’s policies have already started showing positive results.
There is significant improvement in economic indicators. The external sector has stabilized and the fiscal deficit has declined significantly in the first six months of the financial year.
Low tax-to-GDP ratio is amongst the fundamental problems of Pakistan’s economy. Unless this is corrected, the country cannot achieve prosperity. Therefore, a multi-pronged revenue mobilization strategy is being pursued to broaden the tax base and raise tax revenues in a balanced and equitable manner.
To cushion the low-income groups from any adverse effects of stabilization measures, the government has allocated sufficient resources for income support and social protection programs and has increased spending on health and education.