The Government of Pakistan has officially announced its decision to shut down all Utility Stores Corporation (USC) outlets by July 31, 2025, marking a major policy shift in its approach to state-owned enterprises. This decision follows a high-level meeting chaired by Finance Minister Senator Muhammad Aurangzeb, held on July 16, 2025, to review the financial viability of USC operations and outline an exit strategy.
Voluntary Separation Scheme (VSS) for Employees
The government is preparing a Voluntary Separation Scheme (VSS) to reduce the closure’s impact on thousands of USC employees. A dedicated subcommittee, led by the Secretary of the Establishment Division, alongside representatives from the Finance and Industries & Production Divisions, is tasked with finalizing a fair and financially sustainable VSS package. The committee is expected to present its recommendations within the week, ensuring a structured and just transition for the workforce.
Privatization or Asset Disposal Under Consideration
Beyond employee concerns, the government is also evaluating the future of USC’s assets. The upcoming report will determine whether to sell or privatize these assets, in consultation with the Privatization Commission. This initiative aligns with broader efforts to restructure loss-making public enterprises and reduce the financial burden on the national exchequer, a policy direction widely supported by the International Monetary Fund (IMF).
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Public Reaction and Concerns
Some support USC’s closure over inefficiencies and losses, while others worry about its impact on low-income families relying on subsidies. Utility Stores, established in 1971, have long been a source of subsidized essential goods for the poor. A ProPakistani reader commented, “Utility stores provided poor people with lower prices and the ability to buy food.”
A Critical Turning Point
This move signals a decisive shift away from government-run retail subsidies and toward market-based reforms. The subcommittee’s recommendations and final plan will shape Pakistan’s subsidy policy and fiscal direction in the coming days.
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