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ECC decides to release 1m tonnes wheat stock

11 January, 2013

ISLAMABAD: Taking serious notice of hike in wheat prices due to its shortage in the country, the Economic Coordination Committee (ECC) of the Cabinet on Thursday decided to release 1.0 million tonnes wheat from Pakistan Agricultural Storage and Services Corporation Ltd (PASSCO) stocks to provinces to bring its prices down.

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ISLAMABAD: Taking serious notice of hike in wheat prices due to its shortage in the country, the Economic Coordination Committee (ECC) of the Cabinet on Thursday decided to release 1.0 million tonnes wheat from Pakistan Agricultural Storage and Services Corporation Ltd (PASSCO) stocks to provinces to bring its prices down.

The ECC met here under the chairmanship of Federal Minister for Finance and Economic Affairs Dr Abdul Hafeez Shaikh to discuss various agenda items of national importance.

The ECC also approved an incentive scheme for promotion of sugar exports and decided to bring rate of federal excise duty from 8.0 percent to 0.5 percent on local sales of sugar equivalent to sugar quantity exported by any sugar mill from its allocated quota. Approximately Rs 1.75 per kilogramme as freight subsidy would be provided on quantity of sugar exported by mills from Export Development Fund. The Federal Board of Revenue through its summary had solicited approval of ECC for reduction in rate of federal excise duty for sugar mills as an incentive for export of sugar.

The ECC was informed that the current price hike of atta in the market is artificial and speculative. There is no shortage of wheat stock in the country and there are far more stocks available than the requirement. The ECC in order to check the rising trend in atta prices and to discourage hoarding decided to immediately release to the provincial governments, through Utility Stores Corporation, local traders and floor mills a total of 1.0 million tonnes of wheat at a price of Rs 1,050 per 40 kgs of wheat from crop year 2009-10 and Rs 1,100 per 40 kgs of wheat from crop year 2011-12.

The ECC also decided to immediately supply required wheat to all the provinces. The ECC further decided to form a committee comprising Minister for National Food Security Mir Israrullah Zehri, Minister for Science and Technology Changez Khan Jamali, Minister of State for Production Khawaja Shiraz, Special Assistant to Prime Minister Kamal Majeedullah and Ministry of National Food Security secretary to explore avenues through provincial governments to ensure availability of required wheat.

The finance secretary gave a detailed presentation to the ECC on the state of economy. He informed that in spite of global financial crisis, heavy floods, high oil prices and bad security situation, the government has been able to maintain macroeconomic stability in the country. He informed that there has been unprecedented increase in exports and foreign remittances during the last four years. The revenue collection is also at the record level and during the last six months there was an increase of 7.1 percent. The government has disbursed Rs 218 billion through Benazir Income Support Programme (BISP) and Baitul Mal while there has been 120 percent increase in pay and pension of employees during the last four years. It was further informed that the inflation rate, which stood at 25 percent in 2008-09 has now been brought down to 9.0 percent only. The growth rate has increased from 1.7 percent in 2008 to 4.3 percent projected for year 2012-13. Agriculture sector also showed remarkable growth from 0.6 percent in 2008 to 3.8 percent projected for year 2012-13.

The ECC also approved a summary by the finance division seeking abolition of investment limits for NIT-State Enterprise Fund. With the approval of the summary NIT has been allowed to trade freely in order to keep balance in the prices of eight listed companies in which the government of Pakistan has substantial share holdings.

In order to overcome the shortage of natural gas for industrial sector, the ECC also approved injecting of liquefied petroleum gas (LPG) air-mix equivalent to 50 million cubic feet per day (MMCFD) gas into dedicated network for provision to industrial sector. The price impact will be borne by the industrial sector only and the domestic consumers will not be affected.

Ministry of Water and Power secretary briefed the ECC over the energy situation in the country. It was informed that there is a generation of 8,500 megawatts (MW) in the country and the demand is around 12,000 MW. There is a shortage of 3,500 MW in the country and the ministry is working hard to fill in the energy gap.

The ECC was informed that actual allocation for power subsidies was fixed at Rs 170 billion for the entire sector, which have been consumed within the first half of the fiscal year and a need was felt to increase the volume of subsidies in the second half of the fiscal, but not as much as in the first half to keep budget deficit within manageable limit. The ECC also approved LPG air-mix policy proposed by the Ministry of Petroleum and Natural Resources.

End.


 
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