ISLAMABAD: Finance Minister Ishaq Dar in his budget speech later this week will announce a special relief package for reduction in input costs for agriculture and industrial sectors to boost exports and economic growth rate, Minister for Planning and Development Ahsan Iqbal said on Tuesday.

Speaking at a news conference, Mr Iqbal also said the army had been assigned the responsibility of spending Rs100 billion allocated for 2016-17 for the reconstruction and rehabilitation of tribal region. The army would continue to look after the job for the next three years, he said.

The minister was caught off guard when asked if crash in cotton production was also contributed, among other factors, by setting up of sugar mills in the southern Punjab’s cotton-producing region by the Sharif family and friends as farmers gave up cotton sowing for sugar-production.

The minister said the Sharif family did not add any sugar mill in the last two years. However, when informed that a new sugar mill had recently been completed in Muzaffargarh, the minister said he had no knowledge.

“The prime minister has directed that farmers be provided relief through fertilisers and reduction in other input costs to turn the economy around,” the minister said. The prime minister issued these directives during a special cabinet meeting on budget he presided through a video link from London.


Says the Sharif family has not acquired any sugar mill in the last two years


He said it was government’s responsibility to support farmers and reduce their input costs. “The finance minister will announce special relief measures in his budget speech for farmers,” he said.

A government official said the federal and Punjab governments were currently going through a consultative process to provide around Rs200bn package on a fifty-fifty sharing basis for the agriculture sector, which contracted 0.2 per cent during the current fiscal year and played a critical role in pulling down the country’s economic growth rate to 4.7pc this year against the targeted 5.5pc.

Mr Iqbal said the country achieved 4.7pc growth rate that was highest in eight years but was marred by problems in the agriculture sector. “Had cotton crop not been affected, the economy would have grown by 5.5pc,” he said.

He said the country’s agriculture sector was in crisis but some people were trying to create gains for their politics. He said farmers were facing tough conditions in many countries including much serious crisis in India and Thailand because international commodity prices have crashed.

One of the key priorities of the government would be to increase agricultural productivity because it would also revive the export sector which itself was suffering because no transformation was allowed over the last 10-15 years for value-added products, he said. “These are the two challenges the government would focus in the budget.”

He said the next year’s development plan of Rs1.675 trillion approved by the National Economic Council (NEC) would have three priorities — energy, infrastructure and human resources development. He said the Rs800bn federal public sector development programme included Rs655bn for development projects of the ministries and divisions, Rs100bn for development of security and rehabilitation of the displaced people, Rs20bn for youth development and Rs25bn for gas development fund.

He said it was a challenge to squeeze development demands of Rs1.8tr in budgetary ceiling of Rs655bn. Of this, Rs468bn was allocated for infrastructure including power, roads, water and physical planning.

A big chunk of Rs157bn was allocated out of budget for the power sector while corporations would spend another Rs250bn out of their own resources for power projects.

The transport and communication sector would follow with Rs260bn while Rs125bn was allocated for China-Pakistan economic Corridor (CPEC)-related projects.

He said the Planning Commission had closed Rs774bn worth of 600 projects in the last three years and saved Rs570bn by rationalising projects costs. He said that under the prime minister’s orders, the western route of the CPEC was given special focus and a 650-kilometre Quetta-Sorab road would be completed by December 2016 and Gwadar-Khuzdar-Ratodero road that would allow Gwadar port’s opening to central Asia, Afghanistan and China.

He said the NEC also directed all the ministries concerned to update their outdated policies like maritime policy and industrial policies of early 2000 and the Planning Commission would monitor the process for completion in six months.

The minister said that out of Rs875bn provincial development plans, Punjab would lead with an allocation of Rs460bn, followed by Sindh Rs211bn, Khyber Pakhtunkhwa Rs143bn and Balochistan Rs61bn.

The NEC took all decisions with consensus and some reservations shown by Sindh and KP were subsequently settled amicably, the minister added.

Published in Dawn, June 1st, 2016

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