Pakistan unveils $64 million subsidy to tackle rising food prices

AFP Islamabad, Pakistan Feb 12, 2020, 11.28 PM(IST)

File photo: Pakistan PM Imran Khan. Photograph:( AFP )

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The move comes as the government already faces mounting pressure over inflation, tax increases, the devaluation of the rupee and other woes.

Pakistan's government has approved a hefty subsidy package in a bid to offset the spiralling costs of basic food staples that threaten to undermine Prime Minister Imran Khan.

The move comes as the government already faces mounting pressure over inflation, tax increases, the devaluation of the rupee and other woes.

Khan's finance advisor Hafeez Sheikh said Wednesday the government had approved a five-month, 10 billion rupees ($64.8 million) package to alleviate the "soaring prices" of basic commodities, including food items such as wheat flour and sugar.

Under the package, some five million poorer Pakistanis would be able to buy discounted basics through the state-run Utility Stores Corporation (USC), which operates stores across the country. 

The stores "will drastically bring down prices of at least 19 food items including wheat flour and sugar during the holy month of Ramadan" starting late April, Sheikh said.

The increasing food prices come as Pakistani farmers keep a wary eye on locust populations. Swarms of the insects have already attacked crops in the provinces of Punjab and Sindh.

Khan's opponents have seized on the food issue to attack the cricketer-turned-leader, who is about 18 months into his premiership. 

Low tax yields and mounting debt, coupled with repeated devaluations of the rupee, soaring inflation and rising utility costs are driving discontent with Khan's administration.

Khan's administration says it has improved increasing fiscal and balance of payments deficits.