ISLAMABAD: Amid criticism over the distribution of free wheat flour in Punjab and Khyber Pakhtunkhwa. The federal government has urged the Gilgit-Baltistan administration to urgently rationalise the cost of subsidised wheat.
The mountainous region’s flour costs are over 10 times lower than the rest of the country. So the GB’s elected government has pledged to raise them.
While prices rose due to pricey imports. Gilgit-Rs8 Baltistan’s billion wheat subsidy from this year’s government budget was exhausted early this year against a supply of 90,000 tonnes.
The finance ministry has criticized the huge price gap and rising subsidy account during IMF fiscal reviews. The ministry has been cutting subsidies as the political government tries to pacify the public before elections.
At a meeting of the Economic Coordination Committee (ECC) of the cabinet last week, the finance ministry agreed to allocate Rs2.9bn to cover the supply cost of 25,000 tonnes to Gilgit-Baltistan for only two months—March and April—to avoid supply shortages during Ramazan.
However, the committee required the GB government and the Ministry of Kashmir Affairs and Gilgit-Baltistan to rationalize wheat prices within a month.
Since 1970, GB has received subsidised wheat. Due to scarce wheat cultivation and poor transportation, wheat flour was expensive in the area.
As Gilgit-flour Baltistan’s selling price hasn’t increased in a while. The price gap between GB’s subsidised wheat and the rest of the country’s unsubsidized wheat has grown.
Flour costs Rs12.5 per kg in Gilgit-Baltistan compared to Rs140 or more nationwide.
GB
Gilgit-Baltistan receives 160,000 tonnes of wheat from the federal government. With the purse in hand, the finance division authorizes the Passco to supply wheat at the budgeted subsidy.
Due to the high cost of imported wheat and rising transit costs, GB’s Rs8 billion wheat procurement budget has been used up with 90,000 tonnes of supplies.
Due to this, Gilgit-shadow Baltistan’s market wheat prices have skyrocketed.
Prime Minister Shehbaz Sharif ordered the Kashmir affairs and GB ministry to report the case to the finance ministry. Which highlighted concerns about the low wheat selling price and the untargeted subsidies that reached the rich and poor.
The ECC advised political involvement to reach consensus on realistic flour prices. Ishaq Dar and Qamar Zaman Kaira convened the region’s representative leadership to reach a consensus.
Gilgit-chief Baltistan’s minister agreed to announce a gradual price increase in a March 1 meeting. He also promised to buy local wheat at the official support price to encourage wheat cultivation.
ECC
Gilgit-finance Baltistan’s secretary told the Economic Coordination Committee that the government had discussed a targeted wheat subsidy and was taking steps to pass on the cost to the wealthy. The GB government has not announced this.
Last week, the ECC was informed that the Gilgit-Baltistan administration would reveal its plan in the coming days, but with Ramazan approaching, wheat flour prices were rising daily and any delay in wheat supplies would worsen people’s suffering.
The committee approved a Rs2.9bn subsidy for 25,000 tonnes of wheat in March and April. It ordered Passco to ship wheat to Gilgit-Baltistan promptly and the National Logistics Cell to provide cheap transport.
Given the limited federal kitty, the GB government may partially shift certain payments for next year to wheat subsidy this year. The Gilgit-Baltistan administration will raise wheat prices and stimulate local wheat cultivation while promising to buy it at the support price for future requirements.
