Kissan package is worth Rs30b, not Rs341b

Over three dozen ruling party lawmakers are said to be united against govt’s economic policies, threatening to...

ISLAMABAD: A recent document of the International Monetary Fund (IMF) exposes the government’s false promise of setting aside over Rs300 billion for peasants when it never intended to spend even 10% of the amount on them.

While the government announced Rs341 billion in Kissan package last year, documents sent to the global lending agency promise about Rs30 billion in actual spending.



A Letter of Intent and an attached Memorandum of Economic and Financial Policies (MEFP) that Finance Minister Ishaq Dar sent to IMF Managing Director on March 10 reflects what actually the government wanted to spend.

“Budgetary spending as a result of new agricultural spending package (0.1% of GDP) will be absorbed within the existing expenditure envelope, including at the provincial level,” the MEFP states.

Pakistan’s 0.1% GDP comes to around Rs30 billion. While there were concerns about the budgetary impacts of the Rs341 billion package, the government told the IMF the spending will not affect the deficit target of 4.3% of GDP.

The written assurance to the IMF highlights the deceptive policies of the government, which has been severely criticised for ignoring the agriculture sector in its three years in power. This eventually resulted in the negative growth in the sector that employs about 45% of Pakistan’s total labour force.

When asked to comment on the report, Finance Ministry spokesperson Dr Shujat Ali promised to respond but did not call back until the story was written.

Over three dozen ruling party lawmakers are said to be united against the government’s economic policies, threatening to revolt against the party. Almost every third parliamentarian in his budget speech highlighted the miserable condition of the country’s farming community.



The federal government has also announced a Rs50 billion cash package for the farmers in the upcoming fiscal year in the shape of subsidies on fertiliser and electricity. However, the budgetary allocations for the new fiscal year are not sufficient to meet these expenditures.

Last September, Prime Minister Nawaz Sharif unveiled the Rs341 billion Kissan package, boasting it would bring prosperity in the lives of 1.2 million farmers. The package was intended to alleviate the sufferings of farmers, who suffered massive losses due to slump in commodity prices and growing input costs.

However, the IMF document clearly shows the government’s aim was never to give such a big bounty to the poor farming community.

The Kissan package is the second initiative of PM Nawaz that has failed to fully materialise following the miserable outcomes of Prime Minister Youth Loan package due to alleged mismanagement by the National Bank of Pakistan. Against the initial estimates of giving Rs100 billion loans under the scheme, so far disbursements remain in the range of Rs8 billion.

A food and agriculture official said about Rs15 billion have already been disbursed in the shape of subsidies on phosphate fertiliser. Cotton and rice growers of Punjab got about Rs24 billion in assistance out of which the federal government’s share was roughly Rs12 billion.

The government had promised ensuring the banks disburse Rs616 billion agriculture credit but between July and April, the credit amount stood at Rs368.7 billion, according to the State Bank.

Published in The Express Tribune, June 22^nd, 2016.