Govt increases stipend under Ehsaas Kafalat program
Aftab Ahmed
Islamabad: The government has increased the stipend by Rs 166.33 per beneficiary per month under the Ehsaas Kafalat program with effect from January 1, 2022.
The economic coordination committee has considered the increase in the stipend of beneficiaries under the Ehsaas Kafalat Program and approved the increase with effect from the start of the new calendar year.
The government approved Social Safety, which titled “Indexation Policy for Cash Transfer “proposal in the summary along with the indexation mechanism for periodic update and increases in the stipend of beneficiaries under Ehsaas Kafalat Program by Rs 166.33 per beneficiary per month with effect from January 1, 2022.
During the ensuing discussion, the Adviser to the PM on Institutional Austerity Dr Ishrat Hussain asked to increase the cash transfer amount in order to facilitate the ultra-poor segment of society.
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The SAPM on Finance and Revenue Shaukat Tarin clarified that the objective of the cash transfers was not for the purpose to root out poverty. However, it was merely an attempt to supplement the people’s incomes of poor families.
Mr. Shaukat Tarin, Minister for Finance and Revenue, chaired the meeting of the economic coordination committee.
The finance division briefed the forum about the case and sought approval of the ECC for the institutional mechanism for the periodic update of regular cash transfers.
Finance Division informed that the mechanism after approval of the Federal Cabinet would complete the prior action under the World Bank’s SHIPT DPL as well as the structural benchmark/policy action under the IMF’s Extended 2019-20 Fund Facility Program.
Cash Transfer Under Ehsaas Program
Meanwhile, the Ministry of Finance and Revenue, Finance Division is engaged with the World Bank Group (WB) for two Development Policy/Program Based Loans (PBLs). These PBLs namely Securing Human Investments to Foster Transformation (SHIFT) and Resilience Institutions for Sustainable Economy (RISE) will enable the Government to receive USD 50 cash for budget support subject to completion of agreed policy prior actions under the programs.
One of the Indicative Trigger for prior action No.7 under SHIFT is that” Cabinet approves a framework allowing vertical expansion of BISP’s Kafalat Program with a periodic update of regular cash transfer benefits”.
This requires BISP to develop a framework for the vertical expansion of Kafaalat beneficiaries under the Ehsaas Program developed in consultation with the World Bank.
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It is pertinent to mention that the introduction of the framework is also a requirement under IMF’s Extended Facility Program,2019-20 as well as a task the Prime Minister’s Perform Delivery Unit(PMDU) had designed.
Furthermore, the design committee of BISP had cleared the framework, namely” Indexation of Cash Transfer” and board of BISP had considered it. On the directions of the Board, it had shared the framework with Finance Division for views/comments.
Meanwhile, Finance Division is of the view that the “BISP unconditional cash transfer under Ehsaas Kafalat Program has undergone transformational change in the last years in terms of size and number of regular beneficiaries.
Given this and government’s fiscal situation, regular automatic enhancements an option, as this will have widespread financial repercussions in other sectors as well”.
