There is an inconsistency of over Rs 19 billion in the subsidy for urea and DAP in the current fiscal year between what was budgeted by the Ministry of Finance and what is in documents of the Ministry of National Food, Security and Research (MNFS&R).
Finance Minister Ishaq Dar in his 2016-17 budget speech announced a Rs 46 billion subsidy on fertiliser - Rs 36 billion on urea and Rs 10 billion on DAP - to support the agriculture sector against rising cost of inputs - which was to be equally shared between the federal and provincial governments.
Official documents of MNFS&R noted a subsidy of Rs 27.96 billion - Rs 20 billion less - for urea and DAP for the ongoing fiscal year. When Business Recorder contacted Secretary Finance Dr Waqar Masood, he denied making any reduction in the subsidy.
When his attention was drawn towards a brief of Ministry of NFS&R that indicated a subsidy of Rs 27.96 billion on urea and DAP for the current fiscal year, he said he was "not in the picture about any such brief" and insisted that the government would provide subsidy as announced in the federal budget.
Secretary Finance further added that in addition to the subsidy on fertiliser, the government was also subsidising agriculture tube wells.
According to an official document of MNSFS&R as per sequel of the previous year the federal government in consultation with provincial governments has provided cash subsidy of Rs 300 per bag for DAP and Rs 156 per bag for urea fertiliser.
Annual off-take of Urea was estimated at around 110 million bags and the subsidy amount was calculated at Rs 17.160 billion on ratio of 50:50 between federal and provincial governments. The annual off take of DAP was estimated at around 36 million bags and the subsidy amount calculated at Rs 10.08 billion with 50 percent provincial share, the NFS&R document reveals.
A senior official of MNFS&R said that MNFS&R has held several meetings with all stockholders including Finance Ministry, Industries and production, FBR, fertiliser manufactures, provincial governments as well as commercial importers and growers associations but despite repeated requests by the Centre, provincial governments with the exception of Punjab have so far not given any green signal for the transfer of their due share for payment of the fertiliser subsidy.
He said that Sindh, Khyber Pakhtunkhwa and Balochistan governments have continuously adopted the stance in different meetings that they have forwarded summaries to their respective chief ministers for approval to transfer their due share.
The official said that due to delaying tactics by provincial governments, MNFS&R has written a letter to Ministry of Finance for deduction at source against the provinces'' due shares.
He further revealed that the federal government has deposited Rs 6.99 billion as its 50 percent share. Government of Punjab, after the approval of the Chief Minister formally agreed to deposit its share in monthly instalments and issued a letter for payment of the first instalment of Rs 1.1996 billion on September 30, 2016. However, he said that the amount has so far not been transferred to federal pool.
He said that out of a total of Rs 27.96 billion, the due share of federal government is Rs13.98 billion, Punjab Rs 10.20, Sindh Rs 2.65 billion, Khyber Pakhtunkhwa Rs 0.70 billion and Balochistan Rs 0.42 billion.
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