ISLAMABAD:
Prime Minister Shehbaz Sharif’s Ramzan relief package remained underfunded after the cabinet’s Economic Coordination Committee (ECC) on Thursday approved Rs 6,000 crore less than the money demanded due to “fiscal prudence”.
Against the total needs of Rs 29,000 crore to distribute Rs 13,000 per family among the shortlisted 2.1 million families and operational expenses, the ECC approved funds worth Rs 23,500 crore, according to details released by the Finance Ministry after the meeting.
The ECC did not accept the request of the Social Security and Poverty Alleviation Division for approval of the necessary funds of Rs 25 billion. The Finance Ministry informed the ECC that only Rs 19,000 crore already budgeted needed to be approved, while maintaining a balance between relief and fiscal prudence.
The ECC considered a summary submitted by the Ministry of Poverty Alleviation and Social Security seeking approval of funds worth Rs 25 billion for the Prime Minister’s Ramzan Relief Package, according to the Finance Ministry statement.
“The Finance Division informed the committee that Rs 19 billion had already been budgeted for the Ramzan package for the current financial year and the rest of the requirements would be released as and when required,” he added.
Accordingly, the ECC approved immediate release of Rs 19 billion to enable early commencement of disbursement, while agreeing that any additional funds would be considered in accordance with evolving requirements and available fiscal space, the Finance Ministry said.
The government announced in the national press on Thursday that the Prime Minister had approved the Rs 38 billion Ramzan relief package.
However, the Rs 38 billion includes the Rs 10 billion that is tied to the aid package but is essentially part of Pakistan’s commitments to international lenders to annually increase stipends for Benazir Income Support Program beneficiaries.
The ECC’s decision to approve and disburse funds in tranches may delay the expected benefits as the government’s plan was to immediately release Rs 13,000 to 2.1 million identified families.
With the approval of Rs 19,000 crore under the budget allocation of the Ramzan package and another Rs 3,500 crore through reallocation, the Poverty Alleviation Division is now short about Rs 6,000 crore, according to government officials. They said the option would be to reduce the number of beneficiaries or the one-time cash stipend, or for the Ministry of Finance to be willing to disburse the remaining amount.
The Finance Ministry stated that the Rs 29 billion was arranged through three components considered by the ECC, including supplementary technical grant, operational expenses and regularization of reallocated funds. The ministry stated that this financing structure ensures that the package is fully resourced while maintaining fiscal discipline and transparency in implementation.
However, despite adding these three components, the prime minister’s package was still underfunded by Rs 5.5 billion.
A senior Finance Ministry official said there would be constant pre- and post-audit of the database of beneficiaries selected through various checks.
