After 53 years in operation, the Utility Stores Corporation, which managed the iconic government-run utility stores across 6,000 locations in Pakistan as of 2024, is reportedly set to close down. According to the Ministry of Industries and Production, the government is considering shutting all utility stores and reallocating its staff to other institutions. At first glance, this seems like a significant loss.

The utility stores were a staple in many communities, offering essential items at prices lower than market rates, thanks to government subsidies aimed at ensuring that low-income areas had access to affordable goods. In recent years, however, the price difference at these stores had narrowed, with some items even matching or exceeding market prices. Yet, the utility stores symbolised more than just a source of cheaper goods. They embodied the idea that the government was responsible for the welfare of its poorest citizens, taking direct action to ensure they received what they needed. But now, the situation has changed. The government is looking to exit non-essential businesses to reduce its expenditures.

This includes cutting subsidies on various items, a policy that, while painful, is necessary.Without reducing its spending, the government will struggle to fund nation-building initiatives that are crucial for the country’s development.

In an ideal world, the utility stores would continue to operate, but given the current economic climate, the government’s withdrawal from subsidising essential goods might be a necessary step. The real concern now shifts to the employees of the Utility Stores Corporation—approximately 60,000 across Pakistan. Reassigning such a large workforce, especially when many are employed in their local communities with limited skills for other government roles, will be challenging.

Ideally, the government could divest from the Utility Stores Corporation, allowing a private player to take over and run it as a chain of grocery stores, thus preventing mass unemployment. How or whether the government will pursue this path remains to be seen. However, given the drastic measures being taken in other areas to cut costs, it wouldn’t be surprising if the iconic neighbourhood utility stores are also on the chopping block.