Fertiliser grant: Centre fails to recover subsidy from three provinces

Except for Punjab no other province has transferred its due cut

ISLAMABAD: Almost nine months have passed since the announcement in budget of a Rs20-billion fertiliser subsidy for farmers, but three out of four provinces have yet to contribute their due share.

As part of the subsidy programme, half of the share is borne by provincial governments according to their fertiliser needs, however, except for Punjab no other province has transferred its share.

Sindh’s share in the federal pool to be spent as subsidy on the import of Di-ammonium Phosphate (DAP) amounts to Rs2.1 billion while Khyber-Pakhtunkhwa’s (K-P) contribution is estimated at Rs0.5 billion. Balochistan has to provide Rs0.4 billion.

According to officials, the federal government and Punjab have already released their share of Rs10 billion and Rs7 billion, respectively, and of these around Rs12 billion has been disbursed among 17 fertiliser importing companies.

Sources said representatives of the provincial governments had many a time reiterated their commitment during crucial meetings, but they did not fulfil their promise.

They added Sindh and Balochistan governments were ready to release the amount, but had not done so far. However, the K-P government has objected to its designated share, terming it quite high.

The finance ministry through the State Bank of Pakistan (SBP) has disbursed Rs5.7 billion as first installment to the companies for the import of DAP in October, Rs5.76 billion as second installment in November and Rs1.62 billion last week for imports made in December.

Additionally, the ministry has also adjusted Rs1.53 billion through the Federal Board of Revenue under the head of sales tax for the fertiliser importing companies.

The total requirement of DAP in the country is almost 1.7 million to 1.8 million tons annually and the local manufacturing companies hardly produce 0.7 to 0.8 million tons and the remaining one million tons is imported.

Sources said the Finance Division was facing difficulties in making payments to the companies due to delay in the release of outstanding amount by the three provinces.

At the same time, the Finance Division has faced criticisim from the Punjab government that has questioned the government’s competence regarding release of the subsidy amount.

Published in The Express Tribune, March 15^th, 2016.

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