ECC approves Rs 11.3 billion payout for dismissed Utility Stores workers
The Economic Coordination Committee has approved the release of Rs. 11.3 billion to clear the outstanding dues of workers dismissed by the Utility Stores Corporation, as the government moves ahead with winding up the state-run retailer. The ECC Utility Stores workers payout is meant to settle salaries, severance and other dues owed to staff who lost their jobs.
More than 7,000 workers were dismissed in September 2025, with thousands more laid off earlier, as the government decided to close down the loss-making corporation. The dismissed employees staged repeated protests over unpaid salaries and severance, turning the wind-up into one of the year’s most visible labour disputes.
ECC Utility Stores workers payout: what was decided
The ECC approved the release of the funds specifically to clear the dues of the dismissed workers. The Finance Ministry had said in September 2026 that “substantial progress” had been made on employee payments, and Thursday’s decision puts a figure on the settlement the government is prepared to fund.
The payout covers the backlog built up since the dismissals: unpaid monthly salaries, legally owed severance and related benefits. For workers who have gone more than a year without a steady income, the release of the money is the first concrete sign that the settlement process is moving.
Why Utility Stores is being wound up
The Utility Stores Corporation was set up to sell subsidised essentials through a national retail network, but years of losses, mismanagement and a shrinking role in price stabilisation left it a fiscal burden. The government’s decision to wind it up fits the broader push to exit loss-making state enterprises, a reform the IMF has pressed for under the ongoing programme.
The corporation’s closure ends one of the oldest instruments of the state’s retail intervention, one that generations of shoppers knew as the neighbourhood outlet for subsidised flour, sugar and ghee.
What the workers are still watching
Approval of the funds is one step; disbursement is the next. Dismissed workers and their unions will be watching the timeline for actual payments, the formula used to compute individual dues, and whether the settlement covers the full backlog or only part of it. Past government payout announcements have sometimes stalled between approval and payment.
For now, the ECC’s decision gives the workers something they have lacked for a year: a funded commitment with a number attached.
FAQ
How much did the ECC approve for Utility Stores workers?
Rs. 11.3 billion, to clear the dues of workers dismissed by the Utility Stores Corporation.
How many workers were dismissed?
More than 7,000 in September 2025, with thousands more laid off earlier as the government decided to wind up the corporation.
Why is Utility Stores being wound up?
The state-run retailer had become a persistent loss-maker, and the government decided to close it as part of the wider push to exit loss-making state enterprises.
What does the payout cover?
Unpaid salaries, severance and other dues owed to the dismissed workers.
