ECC approves launch of ETCSP worth over Rs106 billion

ISLAMABAD: The Economic Coordination Committee of the cabinet on Friday approved Launch of the Ehsaas Targeted Commodity Subsidy Program (ETCSP) of the Poverty Alleviation & Social Safety (PASS) Division worth over 106 billion rupees for the period of six months starting from January next year.

The approval was granted at ECC meeting which met in Islamabad today with Minister for Economic Affairs Omar Ayub Khan in the chair. The programme includes subsidy for Beneficiaries, incentive for Kiryana Stores and other operation expenditure. According to the Kiryana Incentive Scheme, target Kiryana Stores are located in communities with average monthly income of less than 30,000 rupees per family.

During the meeting it was informed that in pursuance of the Cabinet Decisions, extensive efforts were undertaken including field visits, market surveys, and meetings with local shop owners / Tajir Associations in dozens of cities across the country.

In addition, wide ranking consultations were held with relevant provincial and federal stakeholders. Resultantly, the Program Design Document has been amended to ensure compliance with the Cabinet Decisions and address the concerns of stakeholders. Further, the PASS Division and National Bank of Pakistan have also started mobilization efforts for beneficiaries and merchants registration.

In order to implement this program, the PASS Division will enter into an MOU with NBP for this purpose and will reimburse all relevant costs incurred by NBP on a monthly basis subject to an independent audit and authorization by the Program Steering Committee.

The PASS Division will hire one of the top accounting firms as an external auditor to review all transactions (subsidy and vendor payments) processed on monthly basis; The three items covered under the program are essential commodities with inelastic demand, therefore, adoption of local prices will be allowed for the disbursement of the fixed per unit subsidy.

According to the Kiryana Incentive Scheme, target Kiryana Stores are located in communities with average monthly income of less than Rs. 30,000 per family. Hence, 8% of subsidy value as incentive for Kiryana Stores (Rs. 12 / transaction, assuming average transaction value of Rs. 500) will be allowed.

After due deliberations, the ECC of the Cabinet approved the summary of the PASS Division for launching of the ETCSP.

Meanwhile, SAPM Dr Sania Nishtar, in a statement, said that Kiryana retailers will be entitled of eight percent special commission, which will also encourage the Kiryana retailers to help the government disburse subsidy in Rashan Riayat programme.

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