The Economic Co-ordination Committee (ECC) of the Cabinet on Wednesday increased cotton cess to Rs 20 per bale from Rs 11, but deferred extension of Research and Development (RD) support for another year, and decided to club it with the overall textile sector package.
Presided over by Prime Minister Shaukat Aziz, the ECC also approved the opening of 100 new Utility Stores Corp outlets in the first phase throughout the country, especially in those areas where majority of the population is living below the poverty line, along with setting up 16 warehouses for supply of essential goods.
After the meeting, Dr Ashfaque Hasan Khan, Economic Advisor to Finance Ministry, briefed the journalists. He said that the government would spend Rs 233.5 million on the first phase of utility stores and warehouses, and added that the Prime Minister had directed Finance Ministry and Planning Division Secretaries to release the approved amount within a week.
He said that total collection from cotton cess was estimated at Rs 240 million annually, of which Rs 132 million would come from existing rate, while Rs 108 million would be arranged from the increase.
However, the ECC was apparently not happy with the way the cotton cess is being utilised and directed the Ministry of Food, Agricultural and Livestock (Minfal) to submit a comprehensive restructuring plan of cotton research institutes, hybrid cotton and Bt cotton, within 45 days, along with utilisation heads.
The ECC also approved revised the criteria for issue of compressed natural gas (CNG) licence by reducing the number of agencies and departments to only five, whose approval would be necessary to establish a CNG station.
Earlier, the process to obtain 'No-Objection Certificate' (NoC) was very difficult due to involvement of over a dozen agencies and departments, but now the government has made it easier, Dr Ashfaque said. He said that now onward the applicants would have to obtain NoC from gas utility company, department of explosives, civil defence, Tehsil Municipal Officer and third-party certification.
The ECC settled the issue of exploration rights of Coal Bed Methane (CBM) gas, as there were counter-claims on exploration and production of gas by federal and provincial governments.
Dr Ashfaque said that Article 146(1) of the constitution says that the federal government only transfers the powers to regulate CBM to the provincial governments under article 146(1) but with three conditions which are as under:
1) The provincial government will not grant rights to explore and produce CBM over the areas already awarded by the federal government for petroleum exploration without the consent of respective companies on case to case basis.
2) CBM operations do not hinder petroleum exploration and production activities.
3) The federal government would have the right to issue exploration and production licences of petroleum in the CBM licensed areas.
Dr Ashfaque said that the ECC reviewed the availability of pulses and noted that sale of pulses on utility stores has increased by 46 percent. With the initiation of steps by the federal government 150,000 tons gram (daal chana) was being imported, of which 100,000 tons would be imported by the private sector and 50,000 tons by Trading Corporation of Pakistan (TCP). He said that the private sector would get Rs 8000 per ton, or Rs 8 per kg, subsidy as per the mechanism adopted in the case of cement.
However, if the private sector refused to import pulses, the government would itself take over this responsibility. He said that the government would import 10,000 tons daal mash to supply it to the consumers at Rs 10 less than the market price.
Dr Ashfaque also gave comparison of pulses rates before June 5 and the week ending June 13, saying that decline in prices had been witnessed in the market and average reduction price was registered at about Rs 5 per kg.
He said that the ECC reviewed wheat procurement process and noted that 4.4 million tons wheat had been procured as of June 11, against the target of 5 million tons, which was 88.4 per cent of total target.
Giving details, he said that Sindh ha procured 795,00 tons against target of 0.7 million tons. Passco was given the target of 1.3 million tons, of which it has procured 1.2 million tons; and Punjab procured 2.5 million tons against 3 million tons.
He said that total wheat stock was 6.49 million tons by June 11, of which Punjab had 3.9 million tons, Sindh 1 million tons, NWFP, 0.134 million tons and Balochistan 70,426 tons, while stock with Passco stood at 1.4 million tons.