The Utility Stores Corporation (USC) has incurred losses of Rs. 2.5 billion over the past three months, reportedly due to poor government decisions, sources within the Ministry of Industries and Production revealed. The corporation’s monthly financial losses have now exceeded Rs. 800 million, raising concerns about its sustainability.

Job Losses and Privatization Concerns
The government’s recent decisions have put the future of 6,000 employees at risk, as plans to close 1,000 loss-making utility stores move forward. Despite being declared a key state-owned enterprise (SOE) under the SOE Act—which prohibits privatization—the government approved the privatization of USC on August 13, 2024.

In a series of abrupt policy changes, the Economic Coordination Committee (ECC) sanctioned a subsidy for utility stores on August 15, only for the Rightsizing Committee to recommend the closure of stores the following day. By August 18, the government withdrew a Rs. 60 billion subsidy, leaving the corporation in financial turmoil.

The sudden withdrawal of the subsidy has caused chaos within the USC, with vendors halting supplies due to pending dues. Sources claim that the removal of the subsidy without parliamentary approval may constitute a violation of the law, further complicating the situation.

Policy Reversals Create Uncertainty
The conflicting decisions—ranging from privatization approval to subsidy withdrawal—have left the USC in a precarious position. The corporation, which was once a key provider of affordable essential goods to low-income households, now faces operational challenges and uncertainty about its future.

The government’s actions have drawn criticism for their lack of consistency, with experts warning that the closure of utility stores could have significant social and economic consequences, particularly for vulnerable communities.