Syed Muhammad Ghaznavi ISLAMABAD, March 24 (INP-WealthPK): The Pakistan government has announced to launch a targeted subsidy plan under the Ehsaas Program’s umbrella. In November 2021, Prime Minister Imran Khan announced allocation of Rs106 billion for the initiative. Rs3 billion was allocated for commodity subsidies via the utility store network in fiscal year 2020-21. That amount was increased to Rs6 billion under the budget for fiscal year 2021-22. Speaking to WealthPK, Dr Rashid, Director General of the Economics Department at International Islamic University, said, “Targeted subsidies are a better alternative than general subsidies. General subsidies allow people from all segments of the society to reap benefits of the discounts, whereas targeted subsidies ensure the use of discounts only by those who are eligible.” The subsidies are to be offered on selected commodities, including wheat, oil and other essentials. A network of general stores is being developed to serve as points of sale and an 8% commission has been offered as incentive for the selected stores. Talking about the items selected to be subsidized, Dr Rashid said, “Fulfilling caloric needs is a concern for low-income households. For those living in high income areas, dietary needs might be their concerns in addition to added consumption of luxury items, but for those on the margins, acquisition of flour, pulses, oil, etc. is a priority.” The program aims to enlist 20 million families with a household income of less than Rs50,000. A similar scheme, under the umbrella of Rashan cards, was tested in the past, but failed to sustain itself due to wrongful declaration of dependents by applicants. To ensure transparency and avoid misuse, only one person per family is allowed to register the family via his/her mobile number for the program. The mobile number will be cross checked against the NADRA (National Database and Registration Authority) database to ensure the truthfulness of disclosure. Speaking about the spirit of the initiative, Dr Rashid remarked that targeted subsidies are in line with Islamic finance. “Islamic finance stresses the need to verify the eligibility of those receiving assistance,” he said. He further talked about leakage that takes place in economic activities and how digitization ensures reduction of such instances.