ISLAMABAD: The federal government has decided to change payment mechanism of commodities being imported by Trading Corporation of Pakistan (TCP) mainly urea, sugar and wheat as the stock of current circular debt has reached over Rs 259 billion with $ 0.6 million payables to banks as interest.
This was revealed at a meeting of Senate Standing Committee on Commerce, which met with Senator Zeeshan Khanzada in the chair on Monday.
Chairman TCP, Syed Rafeo Bashir Shah informed the Committee that currently total principal amount is Rs 105.5 billion against 13 entities/governments whereas cumulative mark-up amount is Rs 153.75 billion, totaling to Rs 259.257 billion as of November 30, 2023.
TCP tenders to buy 110,000 metric tons of wheat
The total amount against USC stood at Rs 86.111 billion, National Fertilizer Manufacturing Limited (NFML), Rs 86.110 billion, Ministry of National Food Security & Research (cotton subsidy) Rs 2.144 billion, PASSCO, Rs 4.928 billion, Sindh Food Department, Rs 8.898 billion, Punjab Food Department, Rs 13.206 billion, KPK Food Department, Rs 9.929 billion, Balochistan Food Department, Rs 7.127 billion, Government Gilgit Baltistan Rs 5. 043 billion, Government of AJ&K, Rs 1.679 billion, DGP Army Rs 1.278 billion, Pakistan Navy Rs 173.52 million and MoI&P (formally MINFAL on account of sugar, Rs 14.519 billion.
Special Secretary Commerce, Sarah Saeed, informed the Committee that a meeting has been held in Finance Ministry under the chairmanship of Secretary Finance, Imdad Ullah Bosal wherein the issue of debts and liabilities came under extensive discussion.
“The concerned departments/Organizations and governments have been directed to make partial payments of principal liabilities otherwise the amount will be deducted through federal adjuster,” she added. The representatives of Finance Division endorsed the words of Special Secretary Commerce.
Chairman TCP noted partial payments accepted out of total principal amount of Rs 80.0827 billion by recipient agencies through reconciled and signed minutes/letters or backed by ECC decision and commitment of recipient agencies to pay principal along with mark-up of amount of Rs 17.219 billion in the shape of written agreements and federal government assurance in shape of ECC decision.
However, decision on amount of Rs 161.955 billion i.e. mark-up Rs 144.7 billion, subsidy share Rs 13.1 billion and incidental charges of Rs 4.1 billion will be taken in due course of time.
“Need a paradigm shift in the public and private sector perceptions regarding TCP and its operations and shift from the past precedents to a new operational and financial model for TCP, “said TCP in its proposal, adding that main focus of this proposal is to cap/reduce the amount of liabilities of TCP/Federal Government without any further accrual of any liabilities to enable TCP to functions as an active and profitable SOE.
The Standing Committee argued that this issue should be sorted out on priority basis otherwise mark-up amount will reach Rs 200 billion by the year end.
The Commerce Ministry opposed a proposal of Committee regarding blanket ban on export of raw salt through amendment in EPO/IPO Act, saying that since Pakistan is a member of WTO, any blanket ban on export could create issues.
The Ministry argued that Imports and Exports (Control) Act, 1950, is primary a legal instrument providing basis for regulating international trade in Pakistan. Moreover, the imports and exports of all goods are regulated through export orders (EPO) and import policy orders (IPO), respectively, issued under these act after seeking approval of the Federal Government. It was also debated that the EPO/IPO contains restrictions for export and import of food to and from Pakistan. The Ministry of Commerce argues that inclusion-wise prohibitions and restrictions in the act would not be appropriate as the act provides powers to the Federal Government to regulate trade.
Deputy Chairman Senator Mirza Muhammad Afridi said that Pakistan possesses the world’s largest and most pure rock salt reserves. He noted that this commodity has an estimated annual market in billions of dollars, which is further growing on an annual basis. He stressed that this commodity has been exported internationally in raw form without a policy that allows maximum revenue for Pakistan, adding that this issue must be addressed. The committee decided to defer the matter and sought the amended draft of the EPO 22 for future deliberation.
The committee also decided to hold meetings with all relevant stakeholders on the legality of the amendment. The Committee directed the ministry to furnish a progress report on the matter within one month and deferred the deliberation for the same period.
Furthermore, the Senate Committee discussed the duty-free import of cars up to 1350cc for disabled persons. Senator Mohammad Abdul Qadir, the mover of the matter, stated that disabled persons should be allowed to import used cars as it becomes difficult for majority to afford new ones. Officials apprised the Committee that the Ministry of Industries and Production and FBR have imposed restrictions on the import of used cars for disabled persons. However, they clarified that disabled individuals can import new cars up to 1350cc without paying customs duty once in ten years. The Committee recommended that disabled personsbe allowed to import used cars up to 1500cc once in 5 years. Additionally, the Committee referred the matter to the Senate Finance Committee for sales tax exemption.
The Committee was briefed on the measures taken to enhance Kinnow exports. Officials reported that Pakistan primarily exports Kinnow to Afghanistan, UAE, Russia, Philippines, Kazakhstan, and Indonesia. However, Kinnow exports experienced a decline last season due to floods and the Ministry is now aiming for a substantial increase in Kinnow exports, setting an export target of $ 150-200 million for the current season.
The officials also stated that Afghanistan has increased duty on Pakistani Kinnow manifold, adding that this issue has been raised with Kabul.
Deputy Chairman Senate, Mirza Muhammad Afridi, suggested that the ministry should include South Korea in the export destinations, as it holds potential demand for Pakistan’s Kinnow. He suggested the Ministry to hold an exhibition domestically so that the locals could be aware of the demand for their product. Chairman Committee recommended an export strategy for oranges, largely the produce in Mardan, Khyber Pakhtunkhwa.
Besides other, Deputy Chairman Senate Mirza Muhammad Afridi, Senator Fida Muhammad, Senator Saleem Mandviwalla, Senator Danesh Kumar, Senator Palwasha Muhammad Zai Khan and Senator Mohammad Abdul Qadir attended the meeting.
Copyright Business Recorder, 2023
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