By: Syed Arif Hussain Shah

The State Must Strengthen — Not Dismantle — the Welfare System

In Pakistan, the closure of the Utility Stores Corporation is being presented by certain circles as an economic necessity and a reform measure. It is being argued that the institution was running at a loss, therefore shutting it down was inevitable, and that modern solutions such as digital subsidies, cash transfers, or digital wallets will replace it.
This argument may sound modern and attractive, but the reality is that a digital wallet can never be a substitute for Utility Stores.
Both are fundamentally different.
One merely shows money on a screen.
The other places flour, sugar, and cooking oil directly into the hands of the poor.

Utility Stores Were Not Just Shops

Utility Stores were not ordinary commercial outlets designed to earn profits.
They were Pakistan’s largest state-run social safety net.
It was a system where:
laborers
daily wage earners
pensioners
widows
low-income government employees
could purchase essential commodities at affordable prices with dignity.
The state directly intervened in the market to protect citizens from hoarders and the inflation mafia.
This is the true concept of a welfare state.

It Was Not a Loss — It Was a Subsidy

Utility Stores were shut down under the label of “billions in losses.”
But I ask:
Is providing cheap flour to the poor a loss?
Is the Ramadan relief package a loss?
Is supporting citizens during inflation a loss?
If this logic is accepted, then:
Public hospitals are losses
Government schools are losses
Benazir Income Support is a loss
The truth is: these are state responsibilities, not businesses.
The spending on Utility Stores was an investment in the people — not a loss.

The Problem Was Management, Not the Institution

If there was mismanagement or corruption, the solution was reform — not closure.
The real issues were:
Political interference
Unprofessional management
Weak procurement systems
Lack of digitalization
Poor supply chain
These were administrative failures.
But who was punished?
Over 11,000 employees
Millions of consumers
This is not reform — this is policy failure.

Why a Digital Wallet Is Not a Viable Alternative

The concept of digital subsidies ignores ground realities.
In Pakistan:
Millions do not own smartphones
Rural areas lack internet access
Elderly citizens cannot use digital systems
Private markets are not bound to subsidized prices
A digital wallet can only transfer money —
it cannot control prices.
If flour is expensive in the market, digital cash will also lose value due to inflation.
Whereas Utility Stores ensured:
Government-controlled prices
No hoarding
Guaranteed availability of goods
This is the difference between a state system and an unregulated market.

Consequences of Closure
After shutting down Utility Stores:

Thousands of families lost jobs
Poor citizens became dependent on expensive private markets
Ramadan and emergency relief mechanisms disappeared
Hoarders and mafias became stronger
Is this what reform looks like?

The Solution Is Revival — Not Closure

My clear position is that Utility Stores should not be dismantled; they should be revived on modern lines.
This institution can still succeed if:
Transparent e-tendering procurement is implemented
The supply chain is modernized
Own brands are introduced
Public-private partnerships are adopted
Corrupt elements are strictly held accountable
A hybrid commercial and subsidy model is followed
All this is possible — if there is political will.
Many countries successfully operate state retail networks.
Pakistan can too.

The State Must Not Retreat

The responsibility of the state is not limited to cash transfers.
The state must:
Control prices
Ensure supply
Protect the poor
If the state withdraws from the market, mafias will take over.
And history shows that mafias never serve the people.

Final Word

The closure of Utility Stores was a wrong decision — but it can still be corrected.
Digital wallets may provide convenience,
but they cannot guarantee bread, flour, and sugar.
People need relief — not just an app.
And real relief comes only through a strong state welfare system.
It is time for the government to review the decision and revive this national welfare institution with modern reforms.
This is not only the demand of employees —
it is the demand of millions of poor Pakistanis.