Pakistan on Monday decided to surrender 10% of the government Hajj quota to Saudi Arabia and approved the provision of additional $163 million for financing the pilgrimage after it could not succeed in plans to ease the burden on the country’s thin foreign exchange reserves through outsourcing the official quota.
The Economic Coordination Committee (ECC) of the cabinet changed its month-old decision, which required half of the intending pilgrims to arrange foreign currency from abroad owing to the alarmingly low official foreign exchange reserves.
The finance minister reporte that the ECC approve the arrangement and modalities for the Hajj Scheme 2023 after discussion, and decided that all the receive applications under the regular Hajj scheme, totaling 72,869, declared successful without balloting.
ECC also approve an additional financing requirement of $163 million in foreign exchange for this year’s Hajj.
With the fresh approval, the government will provide $213 million to finance Hajj expenses, which is far lower than what it would have provided under normal economic conditions in the country.
The Hajj Policy 2023 require that the Hajj quota of 179,210 for Pakistan distributed equally between the government and private schemes.
Under the regular Hajj scheme, about 89,605 pilgrims suppose to go on the pilgrim.
In order to lessen the burden on foreign exchange market, the government set aside 44,802 applications that would be finance by arranging foreign currency from abroad.
ECC was informe that contrary to the hope of receiving 44,802 sponsorships, less than 8,000 got funding from abroad. As a result, the government could not get $194 million from abroad to finance the Hajj expenses.
The cabinet had instructed the finance ministry to provide $90 million and the remaining $194 million for government quota had to come from abroad.
Under the regular government scheme, 72,869 applications receive against 44,190 seats.
The last date for submitting applications under the sponsorship scheme was April 7 but the Ministry of Religious Affairs expected less than 8,000 applications against 44,190 seats.
Because of the poor response to the outsourcing scheme, the ECC decide that the surplus quota surrendered to Saudi Arabia. The situation arose due to the government’s inability to provide foreign exchange to the pilgrims.
As a result, based on estimates of the Ministry of Religious Affairs, at least 8,800 pilgrims, or nearly 10%, under the government quota cannot perform Hajj this year.
Last month, the government had increase Hajj expenses to Rs1.175 million per pilgrim, a surge of 68% over last year.
In March, it is inform to the ECC that the sponsorship scheme of the government’s Hajj quota would generate around $194 million and the private Hajj scheme would bring in over $250 million, based on the cost of packages and received applications, leading to a total outsourced fund of $444 million.
The sponsorship scheme was expected to secure foreign exchange cover for the regular scheme as well.
In consultation with the Finance Division, the religious affairs ministry decide that the remaining quota of the sponsorship scheme transferred to the regular scheme, resulting in the declaration of all applicants (72,869 against 44,190 seats) as successful without balloting.
Resultantly, 28,679 seats of the sponsorship scheme were required to be utilised through the regular scheme.
The ministry needs a net $213 million for Hajj 2023, of which $50 million already release and the remaining $163 million is require from the Finance Division.
Published in the Logical Baat, April 11th, 2023.