ISLAMABAD, June 9: The government here on Saturday announced 20 per cent subsidy on electricity charges for tubewells and increased subsidy on DAP fertilisers from the existing Rs400 per bag to Rs470.

The centre and provinces will share the subsidy.

The increase in the subsidy is supposed to bring down prices of the vital fertilisers by Rs70 per bag.

“This is the subsidy of billions of rupees which will directly benefit farmers,” said Minister of State for Finance, Omar Ayub Khan, in his budget speech here on Saturday.

The minister, however, did not give the exact figure of the total subsidy on DAP, to be extended to farmers in 2007-08.

In this year’s budget, the government has allocated Rs336 million for production of better seeds. Fifteen new seed-testing laboratories will be set up. For better production of cotton, BT Cotton seeds and Bio-Safety arrangements will be introduced.Better availability of seeds is likely to cause 20 to 30 per cent increase in agricultural output next year.

In this year’s Public Sector Development Programme (PSDP), the government has allocated Rs15.8billion for 48 ongoing and 15 new projects.

The government has allocated Rs6billion for an ongoing national programme for improvement of water courses in Pakistan and Rs2.8billion for Land and Water Resource Development Project for Poverty Reduction in the country.

Among the new projects, Rs100m has been earmarked for agriculture and shrimp farming project, Rs470m for special programme for food security and productivity enhancement of small farmers in 1012 villages called Crop Maximisation Project-II, Rs140m for improving productive efficiency of cattle and buffaloes in small holders production system, Rs100m for bio-saline agriculture programme, Rs50m for fisheries training centre at Gawadar and Rs40m for the National Institute of Genomics and Advanced Bio-technology.

Allocations for the ongoing projects include Rs948.4mn for the PARC to improve its research capabilities, Rs327 million for National Programme for Control and Prevention of Avian Influenza, Rs100 million for up-gradation of Central Cotton Research Institute, Multan, and Rs164 million for establishment of facilitation unit for participatory vegetable seed and nursery production programme.