LAHORE: The fertiliser industry has voiced optimism that the government will meet its commitment by making the entire subsidy payments before leaving office.
“This will provide long overdue support to the industry in becoming self-sufficient and not place it in a difficult position where it is forced to increase urea prices,” the industry said in a statement issued on Tuesday.
Finance Minister Miftah Ismail, in a recent meeting, had directed the finance secretary to release Rs4.74 billion in full which was requested recently. He expressed concern over delayed processing of 2017-18 subsidy claims already submitted to the Ministry of National Food Security and Research.
At present, over Rs11 billion is outstanding from the 2016-17 subsidy scheme and a similar amount is due for the current financial year.
“The timid approach of the ministry is beyond comprehension in spite of legal protection provided by a notification and verification of claims by the Federal Board of Revenue,” the industry said.
According to industry players, they have already absorbed losses of Rs106 per bag since the subsidy scheme was introduced to support farmers.
The subsidy was reduced from Rs156 to Rs100 per bag in financial year 2017-18, which required the industry to absorb Rs6.72 billion. It did not include the cost of financing due to delay in subsidy payments and early contribution of around Rs6 billion in FY17 for a total of about Rs12 billion, including similar amounts for the current financial year.
At present, input taxes vary from 5-17%, hence, over Rs14 billion is awaiting adjustment or refund. “Fertiliser is one of the most important industries for an agrarian economy like Pakistan. If the government is indecisive about a consistent subsidy policy or a favourable regulatory environment for the agriculture sector, then, according to fertiliser experts, this essential sector will continue to suffer,” the statement said.
Published in The Express Tribune, May 30th, 2018.
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