The government has decided to shut down utility stores nationwide. This sudden decision is one of the many steps the government is taking to reduce its losses – now that it has to pass the scrutiny of the International Monetary Fund (IMF). Reports say that a high-level committee, led by the industries and production minister, has been formed to develop a comprehensive strategy for the closure. This committee, comprising key officials from finance, IT and other relevant ministries, is tasked with submitting a report to the cabinet within seven days. The officials have been asked to accommodate 3,800 USC employees – either by placing them in the surplus pool or using them to fill in the existing vacancies. There is still uncertainty regarding the execution of the prime minister’s Ramazan package, which used to be distributed through utility stores. Per sources, the committee will work with the Benazir Income Support Programme (BISP) to prepare a strategy to distribute essential items at subsidised rates.
Shutting down loss-making entities is a financially viable idea but the government’s current plan has a lot of loopholes. Using the BISP channel to distribute the Ramazan package, for example, ignores the level of challenges many households, including the middle class, face in this era of rising inflation. Although the rate of inflation has come down, many households are still unable to manage their monthly budgets, given how low salaries are. BISP includes a select category of women. We saw during Imran Khan’s tenure how many Ehsaas beneficiaries were excluded from the list based on their travel history – without considering the fact that many people pay for other’s religious pilgrimages in charity. The concept of utility stores was to provide affordable essentials to those who cannot afford them. This category does not solely include those from low-income households. Subsidised utilities are a lifeline for people in low-paid white-collar jobs who cannot openly ask for financial help.
There are close to 4,000 employees that will be left out of the job when the stores are shut down. And then thousands of people may be deprived of subsidised utilities. A good way of dealing with the situation is to bring kiryana stores (general stores) on board. Through a public-private partnership, the government can access the number of people who rely on credit to buy groceries. Authorities can pay some amount to general store owners to convince them to provide discounted rates to people in need. The government will not have to source or distribute the utilities; the setup is already done. To minimise fraud or misrepresentation, the USC employee could either share a counter at stores or make regular visits to check the logs of customers who bought products at discounted rates. Whatever economists say about the supremacy of market players, we have to understand that Pakistan is a different country where rates of salaries are shockingly low. Many university graduates earn minimum wage and barely make ends meet. Most people need government support to survive.