Utility Store prices

Delaying important policy decisions till the eleventh hour can create unwanted complications in their implementation.

The government's recent decision to restructure the manner in which it subsidises food for the financially less fortunate through the Utility Stores Corporation seems likely to cause considerable distress.

According to a recent report, the government has raised wheat flour, sugar and ghee prices in the range of 25-62pc in an effort to cut untargeted subsidies and also lowered the limit for the maximum quantity of each of these goods which can be purchased on subsidised rates.

Only citizens who qualify for the Benazir Income Support Programme can now get these items at the old, reduced rates. For the rest, the price of sugar has risen from Rs70 per kg to Rs89; the price of ghee by Rs75 per kg to Rs375; and the price of flour from Rs40 to Rs64.8 per kg. The new prices have gone into effect as of Sunday.

The government's decision may look good on paper, but the devil is in the details.

Under the new mechanism, those who qualify for the subsidised rates can avail of them only after they have registered themselves through an SMS service, obtained a one-time password and had their national identity card verified and confirmed.

It is worth asking how many poor families will be able to jump through these hoops without trouble and how many may be forced to pay the higher prices despite being deserving. Mobile phone usage is indeed prolific, but most people still use their devices for very basic tasks.

Meanwhile, there are predators aplenty who take advantage of the vast majority of our population's low literacy rates to extract rent in return for 'help' navigating the state's benefits system. Go to any of the ATMs that disburse BISP payments, and you are likely to find someone nearby charging around Rs500 per transaction just to get people's money out of the machine.

It is, therefore, not unreasonable to expect that similar rent-seekers will take advantage of this new mechanism as well. Has the state anticipated these challenges and taken measures to assist those who may face difficulties? Rationalising and fine-tuning the delivery of subsidies is indeed necessary for a resource-starved economy, but measures like these should be phased in rather than imposed abruptly - that too at a time when people are struggling desperately to put food on the table.