ISLAMABAD, Jan 4: The Economic Coordination Committee (ECC) of the cabinet on Wednesday removed 15 per cent regulatory duty on export of wheat in order to consume surplus stocks in the country.
Prime Minister Shaukat Aziz presided over the ECC meeting.
The ministry of food, agriculture and livestock informed the ECC that flour mills were not taking wheat stocks from provincial governments owing to comparatively cheap imports.
With huge carryover stocks built as a result, the government would be in a difficult position when it enters the next season and face problems in procurement of the commodity as it would have to pay high financial charges for its handling.
The ECC was informed that about 3.578 million tons of wheat was available in the country. This included 2.32 million tons in Punjab, 466,000 tons in Sindh, 167,000 tons in the NWFP, 100,000 tons in Balochistan and 520,000 tons lying with PASSCO.
The ministry of food had proposed to restrict duty-free import of wheat by imposing a 20 per cent import duty and abolishing 15 per cent regulatory duty on exports to Afghanistan. “The ECC decided to waive off 15 per cent regulatory duty on exports to Afghanistan,” Economic Adviser to the Ministry of Finance Dr Ashfaq Hassan Khan said after the meeting.
The ECC rejected the proposal to impose import duty on wheat imports, he said.
He told reporters that the ECC also discussed gas disconnection to textile mills in view of the winter season and constituted a three-member committee to look into the issue in a holistic manner.
The committee comprising deputy chairman of Planning Commission Dr Akram Sheikh, Secretary of Petroleum Ahmed Waqar and chairman of CBR Abdullah Yousaf will submit its report to the prime minister on Thursday for a solution to the issue.
The meeting decided that the subsidy sought by PIA for Haj operations would be discussed by the Ministry of Defence and Finance separately and this issue would not tabled before the ECC.
He said the ECC reviewed price situation in the country during the week ending on December 29, 2005, and noted a “negligible increase” of 0.04 per cent in Sensitive Price Indicator during the week.
The prices of tomatoes registered an increase of 15 per cent but this was attributed to seasonal adjustment. Potato prices reduced substantially, the ECC said.
The SPI stood at 6.2 per cent during July-November period of the current fiscal year as against 13 per cent in the same period of the previous financial year. He recalled that the food inflation had touched 15.7 per cent in April 2005, came down to 5.8 per cent in November as a result of liberal import policy of the government and supply-side management.
He said the wheat price in Balochistan and Sindh always used to be higher than national average but now it had come closer. The national average price of wheat stands at Rs13.12 per kg as against Rs13.25 in Sindh and Balochistan.
The CBR chief told the meeting that tax collection in the July-December period stood at Rs322 billion this year against the target of Rs308 billion, showing a surplus of Rs13 billion. This was 22.7 per cent higher than last year’s tax collection of Rs262 billion during the same period.
