Government’s decision to increase support price of wheat, The Express Tribune

Islamabad:

The federal government deferred the decision to raise the minimum wheat support price by 25% to Rs1,745 per 40 kg for the next crop due to disagreements between federal ministers and provincial governments.

The Cabinet’s Economic Coordination Committee (ECC) will raise the issue again for a decision on Monday as the discussion at the ECC meeting on Wednesday could not be concluded due to a half-cooked summary submitted by the National Food Security Ministry. Research.

Prime Minister’s Advisor on Finance, Dr. Under the chairmanship of Abdul Hafeez Sheikh, the ECC approved a plan to book a Rs. 72 billion circular loan in the budget for this financial year.

In violation of the 1973 Business Rules, the Ministry of National Food Security and Research brought the wheat support price increase summary to the ECC without making it part of the official agenda.

The inclusion of important and sensitive summaries in the eleventh hour in ECC meetings without circulating them among the concerned ministries has become a routine of the Ministry of Food.

So much so, the Finance Ministry in its official handout released after the meeting did not even mention the wheat support price deliberations. Wheat support price is the rate at which the government purchases goods from farmers.

The National Food Security Ministry has increased the support price of wheat for 2021 crops from the current Rs400 to 40 kg, to Rs. Proposed to increase to Rs145 – an increase of Rs345 or 24.6%, sources told The Express Tribune.

Some ministers were against the proposal to increase prices due to its adverse effect on wheat flour rates, which have already increased by more than 50% during the first two years of Prime Minister Imran Khan’s government.

“Asad Umar, Federal Minister for Planning and Development, said,” There needs to be a balance between the interests of consumers and farmers, The Express Tribune.

According to various studies, a 10% increase in the support price of wheat leads to a 2% to 3% increase in total inflation.

There was also disagreement among the provinces over the wheat support price. Punjab – the largest producer of wheat – wanted prices to be Rs 401 per kg. While the second largest producer, Sindh – did not pay the price.

The Khyber Pakhtunkhwa (K-P) government wanted Rs 1,800 and Balochistan favored a price of Rs 1,745. Officials said the Food Ministry lacked details about the potential impact of an increase in the support price of wheat on the farming sector and public procurement.

The ECC will now take up the issue again on Monday.

For the crop this season, the federal government increased the purchase price of wheat from Rs. 300 to Rs. 4000 per 40 kg, an increase of 7.7%, while the purchase price in India was Rs. Increasing from Rs. 101 to Rs. рек per48 per 40 kg, increased by 10. %.

The price of wheat in Afghanistan is equal to Rs 402 per kg.

On an average, wheat is available at Rs 22,200 per 40 kg as against the minimum support price of Rs 1,600.

For this season, the government had set a wheat procurement target of 8.25 million tonnes, against which only 6.2 million tonnes could be procured from farmers, 25% less than the target.

The government is in the process of importing about 1.65 million metric tonnes of wheat, largely due to the decision to export 5.5 million tonnes of wheat and its products.

Kashmir campaign budget

5 August – On a summary raised by the Ministry of Information for allocation of additional funds for payment of media campaigns launched on Kashmir Siege Day, the ECC decided that the Ministry would, through re-appropriation, allocate funds for its budget. May meet the immediate fund requirement. Fiscal year 2021.

The Ministry of Finance has been quoted as saying that any shortfall will be bridged due to re-appropriation of funds through technical supplementary grant by the end of the current financial year.

Pakistan celebrated Kashmir Siege Day on 5 August and spent Rs 13.4 crore on making the atrocities by India public through the local and international press.

Pakistan’s overseas missions mainly spent Rs.370 million by the Washington Mission. The Ministry of Information had advertised Rs 9.7 crore in the local press. The Ministry was of the view that this was already lower due to lower allocation than the indicative budget limit of Rs.9 billion.

Carkey RPP

The Ministry of Power requested the ECC to direct the National Bank of Pakistan (NBP) in respect of the advance payment for Karki Kardanese Electric Urim for settlement of the loan of about Rs 7 billion and its associated costs.

The ECC decided that the Finance Department should join NBP to settle the debt. According to the official handout, it was decided that a well-rounded proposal with all stakeholders on the board be presented to the ECC for final approval.

The loan was obtained in May 2009 at KIBOR by executing a syndicated finance agreement between Lakhra Power Generation Company and NBP. 2.15% interest rate against sovereign guarantee by Ministry of Finance. NBP had sought sovereign guarantee after Lakhra Power Company and Karki defaulted on their debt repayment. Karke also filed an arbitration suit against Pakistan at the International Center for Settlement of Investment Disputes (ICSID).

Subsequently, Pakistan and Karki reached a settlement agreement and the two sides decided to withdraw the case against each other.

Circular loan

The ECC approved a technical supplementary grant of Rs.72.635 billion to Power Holding Limited (PHL) during and after the then financial year to the respective banks or to the financial instruments thereafter.

The Finance Ministry will repay this loan of Rs.72.6 billion from June 30, 2020 to June 2021 for the original loans. Rupee. The next installment of 4 billion will be on 4 November.

The ministry said that Rs72.6 billion would be paid “against the subsidy claims of the outstanding power sector on the part of the Government of Pakistan under the concerned heads”. In an earlier decision, ECC decided to transfer the power sector debt stock of Rs804 billion to public sector public debt.

ECC Institutional Reforms Drs. On Ishrat Hussain formed a committee led by the advisor to the PM and included Dr. Waqar Masood Khan and representatives from Finance and Power Divisions were involved.

The committee will prepare a proposal to submit the power sector dues and other related issues to the ECC as a whole.

In May this year, the ECC approved the transfer of Rs.804 billion stock of circular loans to government books under a condition of the International Monetary Fund (IMF).

The ECC on Wednesday revised the earlier decision to repay the circular loan of Rs.136.5 billion in the last financial year. It said that the circular loan “will be paid more when due, rather than in the financial year 2019-20”.

In the new summary, the decision to repay Rs 136.5 billion in 2019-20 was referred to as “unintentional”. However, in its May 2020 summary, it was decided to refund Rs 136.5 billion as it was the “most expensive loan”.

The Rs136.5 billion loan has been contracted with Kibor for three months at a 2% interest rate.

It allocated Rs10 billion from the Staculus package, which for the Pakistan Energy Sukkh-II, was Rs. An amount of 21 billion was given for payment of first installment of interest / benefit for the period from 21-05-2020 to 20-11-2020.

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *