Islamabad:
On Thursday, the government approved RS25 billion in the resignation package to sack another 6,878 employees of the Utility Stores Corporation (USC), which brought the curtain down to half a century -old unit that earned underprivileged with subsidized goods through its 5,600 expires.
The USC was established in 1971 and had catering for the needs of underrated people by giving them important foods at subsidized prices and also served as a prize mother.
However, after years of wrong leadership due to the appointment of inexperienced people in management positions, the USC ran in losses, causing the government to close it.
“The Cabinet’s Economic Coordination Committee approved a technically additional supplementary grant of the RS30.2 billion to ensure a smooth closure of the USC,” the Ministry of Finance said after the ECC meeting.
Military ruler Yahya Khan had created the USC. Later, the government for General Perez Musharraf expanded the USC network from 1,023 to 5,557 stores. But Prime Minister Shehbaz Sharif decided to shut it down to save annual losses of RS2 billion.
Perez Musharraf’s government had increased the USC network to the Union’s advice level and pushed the number of businesses from 1,023 to 5,557 and staff from 3,892 to 12,749 in 2009, ECC was informed.
Out of the RS30 billion, an amount of RS25 billion has been approved. The remaining RS5 billion has been given to cope with the suppliers ‘claims, pay previous months’ salary and for the salaries for temporarily withheld 832 employees who will also be fired within a year.
The Ministry of Finance said the decision represented a big step towards tackling the long -standing financial burden of USC at National Exchequer, while also protecting the interests of employees affected by the closure.
“By approving the resignation, compensation and payment of outstanding quota, the government ensures that workers receive their rights and thereby dampen the social and financial effect of running the USC,” the ministry said.
The ECC was informed that the cumulative losses of USC in the last 12 years were RS23.8 billion from June 2025, less than RS2 billion a year. RS24 billion
The ECC also decided that the Ministry of Industries and Production would rationalize the financial requirements for the closure of the USC further. It was decided that the USC assets, including properties, would be disposed of in the current financial year, so that the cost of closing was partially met through the sales proceeds.
However, the ECC was informed that 21 properties at the USC could not easily be disposed of, as the company did not have ownership of many of these properties.
A preliminary assessment by the State Bank of Pakistan (SBP) -approved farmers informed the government that the total value of these 21 assets was in the range of RS10.5 billion to RS12.6 billion. Out of these properties, the title of properties belonging to the Roti Corporation of Pakistan, acquired by the USC from the Privatization Commission, was not transferred to the USC.
The Ministry of Industry stated that these properties must first be transferred to the USC, and this may involve additional costs.
The Ministry of Industry had asked Prime Minister Sharif in June this year to either close the USC by July 31, 2025 or continue its activities until privatized with a grant of RS14 billion to clear supplier obligations and stabilize the cash flow.
However, the Prime Minister decided to close the unit and formed a committee, led by Finance Minister Muhammad Aurangzeb, to oversee the closure, early privatization and the conditions for payment of severance packages to ordinary employees.
On July 31, 2025, the USC ceased its operations nationwide and began switching warehouses from stores to stock for disposal.
On Thursday, ECC approved RS13.2 billion for the severance pack for regular employees and RS5.8 billion to the quota for regular and contract employees. It also approved RS2.2 billion. But the last figure depends on the negotiations between the employees’ union and the government.
The government approved RS1.5 billion for payment of wages for the first half of April and to bear operating expenses for July and August 2025. An amount of RS630 million was approved to keep 832 employees from September to November 2025 and another RS805 million for the detention of 326 employees from December 2025 to June 20.
It approved RS2 billion to payment of suppliers’ obligations, while the remaining RS10 billion would be paid in the next financial year.
The ECC ordered the Ministry of Law to explore legal opportunities for the rapid disposal of properties within the Privatization Commission’s regulation framework.
