Mohsin Siddiqui (Chief Reporter)
The Economic Coordination Committee (ECC) of the Cabinet, in a recent meeting chaired by Finance Minister Muhammad Aurangzeb, has greenlit the continuation of the Prime Minister’s Relief Package for the fiscal year 2024-25.
This significant decision, the ECC also declared the warehousing and logistics sector as an industry, marking a pivotal development for Pakistan’s economic framework.
The ECC was informed during the meeting that a total of RS 60 billion has been allocated for the fiscal year 2024-25 under the Prime Minister’s Relief Package and the Ramazan Relief Package 2024. Out of this, RS 50 billion is earmarked for the Prime Minister’s Relief Package, while RS 10 billion has been set aside for the Ramazan Relief Package.
Since January 2020, the Utility Stores Corporation (USC) has been providing five essential items at subsidized rates under the Prime Minister’s Relief Package (PMRP). This initiative is aimed at alleviating the economic burden on the lower-income segments of society. In the fiscal year 2023-24, the federal cabinet had previously approved RS 35 billion for this targeted subsidy model, effective until June 30, 2024, and implemented by the USC.
As part of the ongoing relief efforts, the Ministry of Industries proposed a significant increase in the subsidy per household for the fiscal year 2024-25. The existing subsidy of RS 2,734 per household per month for the fiscal year 2023-24 has been revised upward to RS 3,650 per month for 2024-25, reflecting a 25.09% increase, or RS 916 more per household.
This increase underscores the government’s commitment to providing greater financial support to the vulnerable segments of society, especially those identified through the Benazir Income Support Program (BISP). The revised subsidy structure is expected to have a positive impact on the lives of those who rely on these essential items for their daily sustenance.
The Ministry of Industries has requested the Finance Division to ensure the timely release of funds on a monthly basis for the Prime Minister’s Relief Package 2024-25. The proposed timeline for the disbursement is from August 1, 2024, to June 30, 2025, covering a span of 10 months, excluding the month of Ramazan.
This strategic timing aims to ensure that the funds are utilized effectively and reach the targeted population when they are most needed. Additionally, the ministry sought approval for the continuation of the Prime Minister’s Relief Package beyond June 30, 2024, until July 31, 2024, to accommodate any residual subsidy utilization or until the approval of the proposed package on the existing targeted subsidy model and prices.
In line with the subsidy disbursement, the ECC also approved a turnover tax at the rate of 1.25% on the subsidy amount, to be collected by the Federal Board of Revenue (FBR) from the budgeted subsidy for the fiscal year 2024-25. This move is intended to streamline the subsidy management process and ensure that the allocated funds are utilized judiciously.
In another significant decision, the ECC declared the warehousing and logistics sector as an industry. This recognition is expected to have far-reaching implications for the sector, which plays a crucial role in the supply chain and economic infrastructure of the country.
By granting industry status to warehousing and logistics, the government aims to attract investment, improve efficiency, and enhance the overall competitiveness of this sector. This move is also anticipated to create new employment opportunities and contribute to the country’s economic growth.
The decisions made by the ECC reflect the government’s broader economic strategy to provide targeted support to the most vulnerable segments of society while also fostering the development of critical sectors like warehousing and logistics. These measures are part of a larger effort to stabilize the economy, promote sustainable growth, and ensure that the benefits of economic development are distributed equitably.
As the government continues to implement these relief packages and support measures, the focus will be on monitoring their impact and making any necessary adjustments to maximize their effectiveness. The increased subsidy for households and the recognition of warehousing and logistics as an industry are steps in the right direction, but their success will depend on careful implementation and ongoing evaluation.
