Government to launch PKR 120 billion ‘Ehsaas Targeted Commodity Subsidy Program’ for 20 million households

Although rising prices are driving the domestic increases in the international market, inflationary control remains an important policy objective for the government.

Ehsaas Targeted Commodity Subsidy Program

The government has decided to launch a PKR 120 billion Ehsaas Targeted Commodity Subsidy Program for 20 million households across Pakistan.

According to sources, under the chair of Prime Minister Imran Khan, the federal cabinet approved launching the Ehsaas Commodity Subsidy program for 20 million people who have less than PKR 31,500 income per month.

The government under the scheme will provide PKR 1,000 per family per month to cover staple food items (wheat flour, cooking oil) besides 25% of the food spend for low-income households to reduce the inflationary impact on the most vulnerable.

Similarly, the government will cover 20 million households across Pakistan with a PMT Score of less than 39 and an income of PKR 31,500 per month by annual funding of PKR 120 billion.

Sources said that the government would also give a 5-10% (recommended 8%) incentive for Kiryana stores for (PKR 12 / subsidy transaction) on the value of the subsidy amounting to PKR 7.3 billion for FY 2021.

Although rising prices are driving the domestic increases in the international market, inflationary control remains an important policy objective for the government.

Over time, the program may enable the government to remove current untargeted subsidies and move to targeted-subsidy-only mechanisms as envisioned in this paper. The government may choose to reduce the size of the targeted subsidy program or end it once the current inflationary cycle ends or the economic situation improves.

According to the ETCSP design, registered stores and beneficiaries will go through a robust verification process to lessen the fraud rate.

Sources said that the beneficiaries would enroll through a secure portal, with eligibility cut-off authenticated by BISP, family information validated by NADRA, and CNIC-mobile number pairing certified by Pakistan Mobile Number Portability Database.

When availing subsidy, beneficiaries will be expected to go through 2-factor authentication comprising physical verification of CNIC, and an OTP sent to the beneficiary’s registered mobile number. The Kiryana stores will go through all checks mandated by the State Bank of Pakistan, including CNIC verification by NADRA, SIM ownership writing papers authentication by PMD/PTA, biometric verification, and banking checks.

Moreover, hundreds of beneficiaries and Kiryana stores participated in the scheme, and all subsidy transactions were processed successfully, sources added.

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