Islamabad:
The government approved Thursday 25 billion starting packages in order to dismiss 6,878 employees of Utility Stores Corporation (USC), dropping the curtain on a half-century entity which served the disadvantaged with goods subsidized through its 5,600 outlets.
Created in 1971, the USC had met the needs of poorly served people by providing them with essential foods to subsidized prices and also acted as a price moderator.
However, after years of mismanagement due to the appointment of inexperienced people in management positions, the USC encountered losses, which prompted the government to close it.
“The firm’s economic coordination committee approved an additional technical grant of 30.2 billion rupees to ensure the smooth closure of the USC,” said the Ministry of Finance after the ECC meeting.
The military sovereign Yahya Khan had established the USC. Later, the government of General Pervez Musharraf extended the USC network from 1,023 to 5,557 stores. But the government of Prime Minister Shehbaz Sharif decided to close it to save annual losses from RS2 billion.
The Government of Pervez Musharraf had increased the USC network at the level of the Union Council, increasing the number of points of sale from 1,023 to 5,557 and staff from 3,892 to 12,749 by 2009, the ECC was informed.
Of the 30 billion rupees, an amount of 25 billion rupees was approved for dismissed 6,878 regular, contractual and daily employees. The remaining 5 billion rupees were given to erase the providers’ complaints, pay wages from previous months and for wages of 832 temporarily kept, which will also be dismissed within one year.
The Ministry of Finance said that the decision represented a major step towards responsible for the treatment of the long -standing financial burden of the USC on the national treasury, while protecting the interests of the employees affected by the closure.
“By approving the dismissal, remuneration and payment of pending contributions, the government ensures that workers receive their rights, thus depriving the social and economic impact of the liquidation of the USC,” said the ministry.
The ECC has been informed that the USC cumulative losses over the past 12 years were 23.8 billion rupees in June 2025, less than 2 billion rupees per year. The losses of 24 billion rupees in 12 years were equal to 34% of the 70 billion annual budget rupees that the government gives for discretionary expenses on the regimes of parliamentarians.
The ECC has also decided that the Ministry of Industries and Production would more rationalize the financial requirements for the closure of the USC. It was decided that the assets of the USC, including the properties, would be eliminated during the current financial year, so that the closure cost was partially reached by the product of the sale.
However, the ECC was informed that 21 USC properties could not be easily eliminated, because the company did not have the property of many of these properties.
A preliminary evaluation carried out by the State Bank of Pakistan (SBP) – approved surveyors informed the government that the total value of these 21 assets was around 10.5 billion rupees at 12.6 billion rupees. Among these properties, the title of properties belonging to the Roti Corporation of Pakistan, acquired by the USC of the Privatization Commission, was not transferred to the USC.
The Ministry of Industries said that these properties must first be transferred to the USC and that it can involve additional costs.
The Ministry of Industries had asked the PM Sharif in June of this year to close the USC by July 31, 2025 or to continue its operations until privatization with a subsidy of 14 billion rupees to erase the liabilities of suppliers and stabilize cash flows.
However, the Prime Minister decided to close the entity and set up a committee, led by the Minister of Finance Muhammad Aurangzeb, to supervise the closure, early privatization and the terms for the payment of layoffs for regular employees.
On July 31, 2025, the USC ceased its operations nationally and began to pass actions from store stores for elimination.
The ECC approved Thursday 13 billion rupees for the starting package for regular employees and 5.8 billion rupees for the contributions of regular and contract workers. It also approved 2.2 billion rupees at 6.4 billion rupees for payments to contractual employees and at daily wages. But the final figure will depend on the negotiations between the employee union and the government.
The government approved 1.5 billion rupees for the payment of wages for the first half of April and for operational expenses for July and August 2025. A sum of 630 million rupees was approved for keeping 832 staff members from September to November 2025 and another RS805 million for the retention of 326 employees from December 2025 to June 2026.
It approved 2 billion rupees for the payment of sellers’ liabilities while the remaining 7 billion rupees would be paid in the next financial year.
The ECC ordered the Law Ministry to explore legal paths for the rapid elimination of properties within the framework of the order of the privatization committee.
