Imran Khan said that the government is focusing on policies to contain inflation but is facing a hard time as inflation is driven by global rather than domestic developments. Image Credit: Pakistan Information Department

Islamabad: Pakistan’s Prime Minister on Wednesday announced Rs120 billion ($708 million) relief package to reduce the inflationary pressures and support poor households.

The massive economic relief package will benefit as many as 20 million families and will have a positive impact on the lives of 130 million Pakistanis - almost 53 per cent of the country’s total population.

Under the ‘Ehsaas Rashan’ programme, the federal and provincial governments will spend Rs120 billion to offer food subsidies. The eligible families can purchase three essential commodities, ghee, flour, and pulses, at 30 per cent lower prices for the next six months, the premier announced.

Digital food stamps programme

The food stamps programme has been specifically designed to reach the most deserving beneficiaries. Pakistan’s Ehsaas social protection initiative has developed a digital system in collaboration with the National Bank of Pakistan (NBP) to reach out to the beneficiaries through a network of grocery stores.

“The use of a digital platform will help track utilization of subsidy by each beneficiary at the product and geographical level” which will also make the process more transparent, the official statement said. An online registration portal will be launched this week.

The programme will cover 20 million households across Pakistan with a poverty score of less than 39 and an income of Rs31,500 per month. The governments of Punjab, Khyber Pakhtunkhwa, Gilgit Baltistan and AJK have agreed to participate in the programme while the federal share of subsidy worth Rs350 per month will be given for each eligible household in Sindh and Balochistan.

Global surge in inflation

In his speech, Imran Khan said that the government is focusing on policies to contain inflation but is facing a hard time as inflation is driven by global rather than domestic developments. He also cited examples of Germany, Turkey, and the United States, facing record-high inflation currently. He also that the oil prices in Pakistan were lower than neighbouring India and Bangladesh as the Pakistan government has cut several taxes to provide relief to the people. Khan also thanked the UAE, Saudi Arabia and China for offering financial support to Pakistan during difficult economic circumstances.

Loans and relief packages

Khan, in his televised speech, also said that the government’s Rs260 billion Ehsaas programme is also operational and benefits 12 million families.

In October, the government launched the ‘Kamyab Pakistan Programme’ (KPP) worth Rs1.4 trillion (US$8.2billion) to help the families struggling to afford the basics and lift Pakistanis out of poverty. Khan said the KPP initiative will offer soft loans of up to Rs500,000 for the poorest 4 million households to build their homes and start businesses. The “biggest welfare project in Pakistan’s history” would also help millions of Pakistanis gain the key skills required for jobs.

Meanwhile, under the Kamyab Jawan Program, the government has already provided Rs 30billion loans to 22,000 small and medium-sized businesses. The program also offers skill training and the country’s biggest Rs47 billion scholarship and stipends programme for 6 million students.