by The government of Pakistan is reportedly considering the permanent closure of Utility Stores Corporation (USC), but this move comes with a significant financial challenge — an estimated Rs. 29 billion must be paid to employees as part of their severance and retirement benefits.
Why Utility Stores May Be Closed
Utility Stores, established to provide essential items at subsidized rates to the public, have long been under financial stress due to rising subsidies, operational inefficiencies, and limited reach. The government is now exploring alternative models, including privatization and partnership with the private sector, to ensure the continuation of discounted commodities without bearing the heavy operational cost of USC.
Govt Needs to Pay Over Rs. 29 Billion to Staff to Close Utility Stores Permanently.
Financial Implications
Closing down the USC is not as straightforward as it may seem. With thousands of employees under its payroll, the government would have to settle all liabilities, including gratuities, pensions, and other dues. Estimates suggest that this settlement could cost over Rs. 29 billion — a huge burden on the national exchequer, which is already strained due to ongoing fiscal challenges.
Impact on Employees and Consumers
The closure of Utility Stores would directly affect thousands of employees who rely on the corporation for their livelihoods. Additionally, low-income families who depend on subsidized products from these stores might face challenges in accessing affordable essentials unless the government introduces an alternate system.
Possible Alternatives
- Public-Private Partnerships: Engaging private retailers to offer essential items at discounted rates under a government-backed subsidy program.
- Digital Subsidy Models: Direct cash transfers or digital vouchers to eligible citizens, allowing them to purchase goods from any retail outlet.
