National Assembly''s Standing Committee on Industries and Production on Friday unanimously decided to send the case of billions of rupees sugar subsidy approved by ECC in 2012 to National Accountability Bureau (NAB) after both the Ministry of Commerce (MoC) and Ministry of Industries Production (MoI&P) showed reluctance to proceed in accordance with the directions of the committee.
Pakistan People''s Party''s government had approved a Rs 2 billion inland subsidy on the export of 1.7 million tons of sugar (1.2 million tons + 0.5 million tons) of Rs 1.75 per kg on export of 1.2 million tons and Re 1 per kg on export of 0.5 million tons. "The committee decided to refer the issue of unjustified export subsidy on sugar to NAB to find out the basis on which subsidy was fixed," said an official statement. Standing Committee on Industries and Production in its meeting held on March 17, 2014 recommended to MoI&P and MoC to refer the matter of sugar subsidy to NAB. However, both the Ministries did not implement the decision because the PTI members tendered resignations en bloc from the National Assembly.
As the PTI returned to the National Assembly after the agreement with the government, Asad Umar convened the first meeting of the Standing Committee on April 22, 2015 which was later rescheduled for May 8, 2015. When the sugar subsidy''s matter came under discussion, Additional Secretary Ministry of Commerce, Azhar Chaudhry informed the committee that sugar mill owners have submitted 4966 rebate claims but no amount has been disbursed so far.
"No action as such has been taken by the Commerce Ministry as it is understood that being the decisions of the Standing Committee the reference to NAB is to be made by that Ministry. Commerce Ministry as respondent would provide assistance to the NAB in conducting the inquiry in the form of any documentary or other support required in this regard," said Commerce Ministry in writing.
Chairman Standing Committee Asad Umar wanted to know on what grounds the previous government extended a subsidy of billions of rupees to sugar industry which is mostly represented by the politicians. When Asad Umar enquired from the Ministries of MoI&P and MoC which Ministry would send a case to NAB, Secretary Industries, Arif Azim argued that the summary was sent by the MoC to the ECC so the responsibility lies with the said Ministry to send case to NAB. On the contrary, Additional Secretary MoC, Azhar Chaudhry, pleaded that since his Ministry moved the summary to the ECC, the case should be sent to NAB by the MoI&P.
Witnessing arguments between the top officials of MoC and MoI&P, Chairman Standing Committee threatened to unveil the facts at a press conference within a few days. However, Additional Director NAB, Asim Lodhi, took the mike and informed the meeting that NAB treats the instructions of PAC and Standing Committees as executive orders, adding that the sugar subsidy case can be submitted to NAB for probe. After hearing convincing words from the Additional Director NAB, Asad Umar directed Secretary of the Committee to send the case to NAB.
Chairman Pakistan Sugar Mills Association (PSMA) Iskandar Khan tried to intervene at the time Asad Umar was detailing as to how the sugar industry made money through rebates and he was not allowed to speak. Iskandar Khan claimed that PSMA had sought inland freight subsidy of Rs 6 per kg but the government approved only Rs 1.75 per kg on the export of 1.2 million tons of sugar and Re 1 per kg on export of 0.5 million tons.
He, however, argued that the amount of subsidy is not meant for the sugar mill owners but for the farmers who are not being paid properly. Farmers are the victims as they have not been educated to enhance yield of sugarcane. He said, the then Chief Justice Supreme Court of Pakistan fixed the price of sugar at Rs 45 per kg when the price of sugarcane was Rs 80 per 40 kg but now the price of sugarcane is Rs 180 per 40 kg and ex-mill price of sugar is Rs 51 per kg. Usad Umar argued that a balanced policy is needed as billions of rupees of financial burden is imposed on the public and farmers and sugar industry is also not satisfied.