THERE is a general impression that blunders were committed in the past during the process of privatization when prized national institutions were divested without enough justification and it seems the history is being repeated in the name of right-sizing as a sword of closure or merger hangs on the heads of important entities. Information given to the Senate Standing Committee on Industries and Production on Friday revealed that the Government was quietly working to close down the nation-wide network of the Utility Stores Corporation (USC) as part of the strategy to save expenditure. As per management of the Corporation, the government had given them two weeks to wrap up issues with the companies, while the Rs50 billion subsidy, which previously offered significant relief to around 26 million deserving households, has been halted.
This is, indeed, shocking that an institution set up with the intent of promoting welfare of the people, especially the low income groups, is facing threats of closure for the same reasons it was created and its existence justified. According to the Secretary Industries and Production, the government wants to get out from the unnecessary businesses claiming that providing subsidy to the utility stores was detrimental to market competition. He also told the committee members that an alternative arrangement would be explored to provide relief to the deserving people which may include cash transfer. It is obvious that the oft-repeated slogan of ‘it is not business of the government to do business’ is being misused to justify closure of the USC outlets. The basic objective of the USC was to have a powerful tool in the hands of the public sector to shield the general public from the exploitative tactics of the unprincipled market forces.
We witnessed in the past that prices of some essential items were manipulated by the private sector to the detriment of the people and the successive governments successfully used the USC network to counter such trends and provide necessities of life to the people at affordable prices. There were times when the USC was the only source to supply essential items like wheat flour, sugar and ghee to the people at affordable rates because of the greed of the private sector to mint money at the cost of the general public. The argument that the existence of the USC was against the principle of market competition is not valid and instead the institution is there to counter unfair market practices. It is also the responsibility of the government to ensure provision of affordable items of daily use to the people during occasions like Ramzan and peak inflation periods and that is why the USC serves as an effective platform to ensure the subsidies reach to the common man in every nook and corner of the country. The proposition that the government will explore an alternative arrangement to provide relief to the masses including cash transfers is fundamentally flawed as cash transfers would indirectly go to the pockets of the unscrupulous business elements.
General Secretary All Pakistan Workers Alliance has maintained that the government collects Rs120 billion in taxes annually from the companies in the form of groceries sale and that Rs25 billion was being paid by the USC, making 18% of the total amount. He also claimed that the Corporation didn’t get funds from the government and the salaries of all the employees were “self-generated”. The facts and figures shared by him show that the Corporation is not a burden on national exchequer and instead it contributes in the form of taxes and duties. One fails to understand what objectives the government intends to realize by closing down such a useful entity merely for the sake of playing to the galleries in the name of right-sizing. Instead of winding up the Corporation, the Government should better grant it the required autonomy to run its affairs in a transparent manner, weeding out corruption in procurement and ensuring quality of the items sold. It was because of the usefulness of the organization that until recently there had been consistent hints from the government to expand its outlets. We hope the government would not make any decision in haste and consider all pros and cons before finalizing the plan for the wind up.
