Government launches voluntary separation scheme for USC employees

The government will launch a Voluntary Separation Scheme (VSS) for Utility Stores employees, sparking debate in the Public Accounts Committee over workers’ future, rising costs, and fears of eventual closure of USC.

Officials confirmed that the scheme’s details will be finalized and shared by Friday, August 22. USC, once Pakistan’s largest chain of subsidized stores with nearly 5000 outlets and 11000 staff, has been gradually reducing operations after the government shifted subsidies to direct cash transfers through the Benazir Income Support Programme (BISP). The VSS aims to support employees, many of whom have served on contracts for more than a decade, by providing compensation as the network downsizes.

During a Public Accounts Committee (PAC) meeting, members expressed concern over the treatment of USC workers. Chairman Junaid Akbar questioned why employees’ salaries were withheld while the Managing Director continued to receive pay and maintain official perks, including five vehicles at his residence. Lawmakers also warned that the VSS could lead to the eventual privatization or closure of USC, despite previous assurances that the stores would remain operational. The scheme is expected to impact thousands of employees, with permanent staff likely to receive priority in compensation packages. Officials estimate that the plan could cost the government over Rs29 billion, including retirement benefits and settlement payments.

While the VSS is intended to reduce financial losses and curb misuse of subsidies, PAC members urged the government to consider structural reforms rather than closing the corporation. Naveed Qamar highlighted that despite inefficiencies, USC had provided essential relief to the public, and any decision on its future should protect workers while maintaining affordable prices for low-income households.