Rs. 23 Billion Later: What Did AJK's 2024 Relief Package Actually Solve?

Introduction

In May 2024, a political and economic crisis in Azad Jammu & Kashmir brought questions of household affordability to the centre of a much wider political confrontation. Among the immediate demands were reductions in electricity tariffs and flour prices, alongside broader concerns about public expenditure and privileges. On 13 May, the federal government approved Rs.23 billion for AJK. Two days later, the Economic Coordination Committee formally approved a summary titled “Provision of Rs. 23 Billion as Additional Grant to the AJ&K Government”, to be provided through a Technical Supplementary Grant on the proposal of the Ministry of Kashmir Affairs and Gilgit-Baltistan.

The intervention quickly translated into concrete consumer policies. The official Radio Pakistan account of the AJK government's notifications states that the price of flour was reduced from Rs.3,100 to Rs.2,000 per 40 kilograms, while domestic electricity tariffs were fixed at Rs.3 per unit for 1–100 units, Rs.5 for 101-300 units and Rs.6 above 300 units. Commercial consumers were placed on Rs.10 and Rs.15 rates across the relevant slabs. The Joint Action Committee subsequently called off its protest following the relief package. Judged purely as crisis management, the intervention therefore worked: the government committed substantial resources, announced measurable relief and succeeded in de-escalating the immediate confrontation.

But ending a protest is not necessarily the same thing as solving the policy problem that produced it.

What exactly did the Rs.23 billion buy?

The first question, therefore, should be: what exactly did the Rs.23 billion buy? The public record establishes the federal grant and the resulting price reductions, but the complete public money trail from federal release, to AJK receipt, to departmental expenditure, and finally to the subsidy received by individual beneficiaries is much harder to reconstruct from publicly available documents. That distinction is important. An allocation is not the same thing as expenditure, and an announced subsidy is not the same thing as a measured policy outcome. A proper assessment requires the actual release orders, AJK revised estimates, departmental expenditure statements and audit records.

There is, however, evidence that the relief was incorporated into an ongoing policy framework rather than remaining only a press announcement. In June 2024, the AJK government's Directorate General Public Relations reported Finance Minister Abdul Majid Khan thanking the federal leadership for the Rs.23 billion package for cheap electricity and cheap flour. The same official statement reported that the AJK government had allocated more than Rs.41 billion for flour subsidy in the forthcoming financial year. It also stated that the reduction in electricity prices had resulted in an estimated more than Rs.10 billion reduction in the Electricity Department's revenue target.

This is a significant piece of evidence because it reveals a cost that is often absent from political discussion. Reducing the consumer tariff does not eliminate the underlying cost of producing or purchasing electricity. It shifts part of that cost elsewhere in the public finances. The government's own figures therefore suggest that the electricity decision was not simply a consumer-price intervention; it was also a fiscal decision with consequences for the revenue position of the electricity department.

How the flour subsidy was administered

The official record also allows us to look beyond announcements and examine how the flour policy was actually administered. The AJK Food Department's published distribution system identifies 11 flour mills and their attached areas and depots across AJK. Its dispatch information records the movement of wheat from Punjab to base go downs, from those go downs to AJK flour mills, and from the mills to 170 depots. The department also maintains a dealer inventory recording individual dealers, the number of bags allocated, dates, villages, union councils and districts.

This is important evidence of implementation. It would therefore be wrong to describe the 2024 flour subsidy as merely an announced promise. There was an administrative supply chain behind it. At the same time, the existence of a supply chain does not by itself tell us whether the policy was efficient, equitable or financially sustainable. To answer those questions, JKPL would need to compare the quantities entering the system with quantities distributed, the cost of the subsidy with the number of beneficiaries, and the district-level allocation with actual demand.

The electricity question

The electricity policy presents a similar problem. In August 2024, AJK's prime minister publicly defended the subsidised electricity rates but also acknowledged the need to make the subsidy more realistic. He stated that the government had asked the federal government to provide electricity to AJK at production cost for five years while AJK developed its own generation capacity. He also said that the government was working to address electricity theft and line losses. This suggests that policymakers themselves recognised that low consumer tariffs could not be considered independently of generation costs, revenue collection, losses and the structure of the power sector.

The Rs.108 billion distinction

The fiscal question becomes even more important when the federal budget is examined. The Federal Budget 2024–25 separately provided Rs.108 billion for the tariff differential to AJK. This was distinct from the Rs.23 billion emergency grant. The distinction matters because the two figures represent different parts of the policy architecture: one was the extraordinary intervention that helped resolve the 2024 confrontation, while the other represented a continuing fiscal requirement associated with the electricity tariff structure.

Crisis management versus policy resolution

The evidence therefore does not support a simple conclusion that the government's policy “failed.” There is evidence of immediate relief, formal budgetary intervention and actual administrative implementation. But there is equally good reason to ask whether the intervention was sufficient to create a durable settlement.

That question becomes more important because the political agenda did not remain confined to the original economic grievances. The later demands of the Joint Awami Action Committee expanded beyond electricity and flour towards broader questions of governance, representation and institutional arrangements. This does not mean that the original economic demands were unimportant, nor does it establish that every subsequent demand was justified. It does demonstrate, however, that economic subsidies alone could not resolve the entire political relationship between citizens and institutions.

This distinction is at the heart of the AJK case. A government can successfully reduce the price of electricity without resolving questions of political representation. It can subsidise flour without resolving institutional distrust. It can negotiate an agreement and implement many of its provisions without necessarily creating institutions capable of preventing the next dispute.

The deeper policy problem may therefore be the reactive nature of grievance management. When grievances become sufficiently intense, governments make extraordinary financial commitments and negotiate under crisis conditions. Such intervention can be necessary, but if it becomes the principal mechanism through which citizens obtain policy responses, governance becomes increasingly crisis-driven. A stronger model would identify grievances earlier, evaluate their fiscal implications, negotiate through permanent institutions and publicly monitor implementation before disagreements reach the point of mass mobilisation.

Recommendations

The first requirement is a public policy and financial audit of the 2024 relief package. The federal and AJK governments should make publicly available the complete financial trail of the Rs.23 billion: the Technical Supplementary Grant, release orders, AJK receipt, departmental allocation, expenditure and any subsequent reconciliation. The audit should distinguish clearly between the Rs.23 billion emergency package, the recurring electricity tariff subsidy and the separate flour subsidy allocations. Without this distinction, public discussion will continue to mix different financial instruments and produce misleading conclusions.

Second, the government should publish a transparent annual cost-benefit assessment of the electricity and flour subsidies. For electricity, this should include generation or purchase costs, consumer tariff revenue, federal subsidy requirements, line losses, electricity theft and outstanding liabilities. For flour, it should include procurement costs, quantities received, quantities milled, quantities distributed, district-wise allocations and the number of beneficiaries. The Food Department has already demonstrated that much of the administrative infrastructure for tracking flour distribution exists; the next step is to make the relevant aggregate data publicly accessible.

Third, negotiated commitments should have a public implementation mechanism. Governments and representative civic bodies should agree on measurable targets, responsible departments and deadlines, followed by periodic public reporting. Citizens should not have to rely on competing political claims to determine whether a commitment has been fulfilled.

Finally, AJK needs a stronger institutional mechanism for grievance management. Economic grievances should be reviewed before they become crises, while political and constitutional grievances should have appropriate forums for dialogue. The objective should not be to suppress mobilisation; democratic protest is itself part of political life. The objective should be to ensure that citizens have credible institutional routes through which grievances can be heard and addressed before confrontation becomes the principal mechanism of policymaking.

Conclusion

The 2024 intervention therefore offers a more complicated lesson than either side of the political debate may prefer. The Rs.23 billion package was not meaningless. It produced immediate economic relief, generated concrete price reductions and helped end the immediate confrontation. The official record also demonstrates that implementation mechanisms were established, particularly in the flour distribution system.

But short-term crisis resolution should not automatically be treated as long-term policy success. The subsequent expansion of political grievances suggests that economic relief addressed some symptoms without resolving every underlying institutional question.

The lesson is therefore not that subsidies do not work, nor that the government simply failed. The lesson is that crisis resolution and policy resolution are not necessarily the same thing.

For AJK, the challenge is to move from crisis-driven concessions towards predictable policy, transparent financing, measurable implementation and institutions capable of addressing grievances before they become crises.

The question for policymakers should therefore not be “Who won in 2024?”

It should be:

What did the Rs.23 billion intervention achieve, what did it cost, who benefited, what remains unresolved, and what should policymakers change?

Those questions should be answered not through competing political narratives, but through budgets, notifications, expenditure records, distribution data and audits.