Agriculture tube wells for Balochistan: ECC decides to continue subsidy till 2016

Economic Co-ordination Committee (ECC) of the Cabinet has decided to continue subsidy on agriculture tube wells for Balochistan till December 31, 2016 of which the share of federal government will be 40 per cent, well informed sources in Finance Ministry told Business Recorder.
Finance Ministry, sources said, proposed to freeze the number of subsidised tube wells to 15660 and reduce the share of federal government from 40 to 30 per cent and increase in share of Balochistan from 60 to 70 per cent. Finance Ministry also proposed that subsidy ceiling should be reduced from Rs 65,000 to 50,000.
Balochistan agriculture consumers were subsidised from July 01, 2001 due to which QESCO is charging agri-consumers at flat rate of Rs 4000/- per month and deduct the same from the subsidy bill.
The remaining amount is shared between Government of Pakistan 40%, Government of Balochistan, 30% and WAPDA/QESCO 30%.
Keeping in view the decision, the agriculture community was subsidised till June 30, 2010 and subsidy was withdrawn from July 01, 2010, as no amount was earmarked by Federal Govt. as subsidy for agri tube wells of Balochistan in the budget of FY 2010-11. Consequently, the billing was restored to the normal mode and the electricity bills were issued on meter reading basis.
The farming community agitated on the issue and demanded restoration of the subsidy. Prime Minister Gilani during his visit to Sohbat Pur (Balochistan) on August 12, 2010 and subsequent visit to Quetta on June 05, 2011 announced that ' Federal government will pay Rs 4 billion and Government of Balochistan will provide Rs 3 billion to clear the outstanding liability only on the legal /authorised agriculture tube wells of Balochistan'. The Prime Minister during his visit to Quetta in July 2012 again assured the restoration of the subsidy for agri consumers of Balochistan. However, neither notification for restoration of subsidy was issued nor Rs 7 billion was paid to QESCO. The agri consumers refused to pay more than Rs 4000/- per month. Resultantly, the receivables against agri consumers rose to Rs 54,636.28 million from July 01, 2010 to November 30, .2012.
Finance Division restored the subsidy for the period of two years from December 01, 2012, but without clarification/fate of intervening period ie from July 01, 2010 to November 30, 2012. Further, Balochistan Zamindar Action Committee also raised concerns on new payment mechanism/share ie Rs 6000 per month and demanded to restore previous mechanism/share ie Rs 4,000/-PM and insisted that the subsidy for the intervening period be paid. Subsequently, Rs 122.360 billion has become outstanding against the stakeholders as on 31st December, 2014.
Currently 29522 agri tube wells (QESCO's = 28088 & KE's = 1434) have been installed in Balochistan. State Minister for Petroleum & Natural Resources pointed out that agri consumers of district Lasbela Balochistan are not being subsidised as these consumers are being energised by K Electric. This anomaly requires to be rectified and agri-consumers being fed by KE may also be subsidised. KE has conveyed that they are providing electricity to 1434 agri-consumers of district Lasbela, Balochistan.
Prime Minister's office was forwarded proposal of Government of Balochistan along with request of Balochistan Zamindar Action Committee whereby they have requested to extend agriculture subsidy for another five years.
Cabinet Committee on Energy (CCE) considered the situation and constituted a high level committee for its resolution. In order to devise a comprehensive strategy on recovery of outstanding electricity bills from agri-consumers, the committee met twice; once at Quetta on February 09, 2015 and then at Ministry of Water & Power Islamabad on February 25, 201 5. The committee thoroughly deliberated on the issues related to agri-consumers of Balochistan and recommended to continue the subsidy.
Following discussions at the committee level, the Ministry of Water and Power proposed to continue the subsidy as per recommendation for a period of two years from January 1, 2015 to December 31, 2016 subject to commitment of past payments by all concerned/ stakeholders. However, QESCO requested to restore the subsidy from December 01, 2014 instead of January 01, 2015 as previous subsidy was applicable till November 30, 2014.
After detailed discussion, the ECC approved continuation of subsidy to agri consumers Balochistan from December 1, 2014 till December 2016.