ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet was informed that Gilgit-Baltistan (GB) is working on a plan of targeted wheat subsidy and measures were underway to pass on the actual cost to the affluent segments of society.
On a summary moved by the Ministry of Kashmir Affairs and Gilgit-Baltistan, ECC approved release of 25,000 MTs of wheat to GB for the months of March and April 2023 along with Rs2.9 billion technical supplementary grant to meet the immediate needs.
In the summary, the ministry contended that wheat supply to GB on subsidized rates dates back to 1970s and this was necessitated due to exorbitant prices of wheat flour in the area as the staple was sparsely cultivated in the region and transportation was too costly due to underdeveloped infrastructure.
However, over the years difference between the subsidised wheat prices in GB and the rest of the country has grown very large as the flour sale price in GB has not been enhanced for quite some time, which currently stands at Rs12.5 per kg against Rs140 plus across the country.
Despite this, wheat and flour are not available to the people on subsidised rates due to a number of governance issues.
Call for increasing wheat support price
The federal government provides 160,000 metric ton annually to GB and the Finance Division gives go ahead to Pakistan Agricultural Storage and Services Corporation (Passco) for wheat supplies so that the same does not go beyond the budgetary allocation.
During the current financial year, Rs8 billion were allocated for wheat procurement for GB which have been fully utilised with around 90,000 metric ton supplies due to increased cost of the imported wheat and enhanced transportation charges.
Supplies are, therefore, held up and wheat prices in the shadow market of the GB region have increased substantially.
Subsequently, the prime minister has taken notice of the situation and directed the ministry to initiate a summary for the prime minister through the Ministry of Finance. The latter raised concerns on low sale price and untargeted nature of the subsidy in its comments on the summary.
The matter was therefore, placed before the ECC on the direction of the prime minister and the ECC considered the summary in its meeting held on 10th February 2023 and directed for political engagement in order to pave the way for broader consensus on realistic flour prices.
Accordingly, the representative leadership of the region was engaged by the finance minister and the Advisor to the Prime Minister on Kashmir Affairs and GB to develop consensus on the issue.
The chief minister GB informed the advisor to the premier on Kashmir Affairs and GB during a meeting held on 1st March 2023 that the GB government will shortly announce a plan to gradually increase the sale price.
He also shared his plan to incentivise wheat cultivation in the region along with the assurance to procure the same on official support price.
The GB finance secretary informed during the meeting that the GB Cabinet had considered the proposal to have a targeted wheat subsidy and measures were underway to pass on the actual cost to the affluent segments of the society.
However, no formal announcements have, however, been made by the GB government and it is likely that the GB government will announce its plan in the coming days.
The ECC was further told that every passing day is pushing the wheat flour prices upwards in the open market and any delay in wheat supply will enhance miseries of the people, therefore, it is imperative that the wheat prices may be stabilised in the local market by injecting more supplies of the subsidised wheat.
The ECC was requested that the Passco may be given an immediate go ahead by the Finance Division for release of wheat quota till March 2023, including outstanding balance; Finance Division may release payment of wheat to GB government during the next financial year in view of the current liquidity crunch; GB government may appropriately enhance wheat sale prices; local cultivation of the staple may be encouraged along with the guarantee to procure the same on support price and NLC may be engaged for wheat transportation to the region.
The ECC was informed that the prime minister being Minister In charge of Ministry of Kashmir Affairs and Gilgit-Baltistan has authorised the submission of proposal with the stipulation that Finance Division shall ensure immediate release of 26,666 MTs for the month of March and April 2023 along with allocation of Rs2.5 billion to meet the urgent requirement of GB.
The prime minister has also directed that the Ministry of KA and GB shall submit a comprehensive sustainable plan for price rationalisation in consultation with concerned stakeholders for consideration of the ECC within 10 days positively.
Copyright Business Recorder, 2023