Senate Committee Briefed on Auto Policy; Officials Emphasize Need for Warehousing Expansion in Pakistan
Federal Government Plans to Close Utility Stores Nationwide: Implications for Low-Income Families
Islamabad:
The federal government is moving forward with plans to close utility stores across the country, a decision anticipated to have significant repercussions for millions of low-income families who have long depended on these outlets for discounted essential goods. This major policy shift follows the government’s recent decision to terminate a substantial Rs50 billion subsidy that had previously provided crucial financial relief to approximately 26 million deserving households.
During a recent Senate Standing Committee meeting on Industry and Production, the Secretary of Industry confirmed that the proposed closure of utility stores is part of a broader right-sizing initiative aimed at addressing the nation’s financial constraints. The government plans to redirect the funds initially allocated for the utility stores subsidy to mitigate the energy crisis, particularly by providing relief on electricity bills. This reallocation underscores the government’s focus on tackling pressing energy issues, even as it impacts essential services for vulnerable populations.
The subsidy that had been in place provided up to 25% discounts on essential items such as flour, ghee, rice, sugar, and pulses. With the subsidy now discontinued, these goods will be sold at regular market prices, effectively eliminating the financial cushion that many low-income families relied on. The Secretary of Industry noted that an action plan for the closure of utility stores is currently under development, including considerations for a support package for the affected employees.
Senate Committee Briefed on Auto Policy and Warehousing Needs
In addition to the discussion on utility stores, the Senate Standing Committee also received a briefing on the country’s auto policy and the pressing need for expanded warehousing infrastructure. Officials from the Ministry of Industry and Production emphasized the importance of developing warehousing as a key component of the nation’s industrial strategy. A proposal to formalize warehousing as an industry is currently under review by the federal cabinet, with the Economic Coordination Committee (ECC) having already given its approval. The committee members expressed strong support for this policy direction.
Pakistan currently produces fewer than one million cars annually. In the electric vehicle sector, 45 licenses have been issued for the production of motorcycles and rickshaws. There are 13 car brands operating in the country, with the potential to manufacture up to five million vehicles domestically. Last fiscal year, the automotive sector contributed Rs300 billion in taxes from car sales.
However, concerns were raised by Senator Saleem Mandviwalla regarding the quality of domestically manufactured cars, which he claimed do not meet export standards. While Pakistan has been successful in exporting tractors and rickshaws, the 4% export target for vehicles was missed this year. This shortfall is attributed to companies struggling to secure export orders and facing legal challenges, including a stay order from the court. Additionally, the government has yet to provide export incentives.
Chairman of the Committee, Senator Aon Abbas Buppi, raised questions about the issue of under-invoicing in the import of MG vehicles. Senator Mandviwalla responded that this issue had been addressed by the court, suggesting that regulatory and legal challenges in the automotive sector are being actively managed.