While finalising budgetary proposals for development spending in the province, the Sindh government had decided to make realistic allocations for timely fund releases. But this did not happen, at least in the case of agricultural development projects.

The provincial government announced in the current year’s budget that it will provide subsidy for tractors and solar-powered tube-wells. The mechanisation of agriculture, as always, remained a priority in the budgetary allocations. The ground realities, however, remain somewhat different.

While the financial year is inching towards closure, solar-powered tube-wells have not been provided subsidy yet. The case of subsidised tractors is different: two installations of Rs500m each have been released this month.

However, farmers’ bodies are questioning the entire process, saying the subsidy is being given on political considerations. Around 1,600 subsidised tractors are to be provided to growers.

Around 250 solar-powered tube-wells were to be provided on subsidy in the 2014-15 budget, given the energy crisis whose severity increases every summer in rural areas. Farmers usually depend on tube-wells powered by electricity. Since electricity is not available all the time, the required irrigation needs of farmland are not met, affecting the per-acre productivity.

The provincial government had made an initial allocation of Rs130m for tube-wells in this year’s budgeted programme, stated to cost Rs1bn. The provision of 70 tube-wells was mentioned in the budget documents, with growers bearing 70pc of the cost and getting 30pc subsidy.

Sindh had made an initial allocation of Rs130m for tube-wells in this year’s budget programme

Why the funds have not been released is anybody’s guess. A report, however, suggests that the growers are pressing for a 50-50 cost sharing. A summary has been moved to the chief minister, but it is pending decision. Meanwhile, some influential landowners have installed subsidised tube-wells on their lands.

A provincial finance department officer suspects that the agriculture department has not completed all documentation formalities for provision of subsidies. “There is no delay on our part. It is evident from the fact that we released Rs500m and then another Rs500m this month,” he said.

Solar panels are costly to install but are very cheap to run. They save farmers’ electricity bills, which vary between Rs25,000-30,000 per month on average, and may go up to Rs55,000 in case of big farms.

Electricity load-shedding is prolonged in rural areas as the summer season progresses. With no power supply for tube-wells, growers use diesel, which adds to their overall production expenses.

Sindh Abadgar Board vice president Mahmood Nawaz Shah points out that solar-powered tube-wells will modernise farming if the project’s implementation is properly planned. This renewable energy has the potential to ensure continuous power supply for 12 hours on average, helping irrigate the targeted area.

Meanwhile, a subsidy of Rs200,000 is given for tractors costing Rs800,000, and Rs300,000 if the price is over Rs800,000. In the current year, 1,400 subsidised tractors were to be provided initially, but reports said the number was later revised to 1,600. The Sindh Bank is supervising the scheme and checking for compliance with financial and application requirements.

“An advertisement appeared in newspapers earlier this month, inviting application forms. The next day, Sindh Bank officials told us that all the forms for the 1,600 tractors were issued and deposited in just one day. Isn’t it mind-boggling,” wondered Sathio. The forms were not even made available at some branches of the bank, he said.

Published in Dawn, Economic & Business, March 30th , 2015

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