ISLAMABAD
The federal budget was passed on June 13 and was supposed to be followed up by issue of various SROs by FBR and notifications by relevant ministries. However, performance of some of the ministries has been deplorable in this regard.
Disbursement mechanism for fertilizer subsidy announced by the government has not been notified so far, thus adding to the anxiety of the industry, which is already running from pillar to post for release of subsidy pledged in the past budget.
The industry however, has started passing subsidy impact to the farmers, instead of hiking the prices or stopping the sales.
The industry had initially stopped the sales however, with an assurance from the ministry of finance that a fertilizer subsidy-notification will be issued very soon the sales were resumed as it was the peak period for the crops. Unfortunately, till date, this notification has not been issued, due to some unknown reasons or procedural-delays.
The previous notification envisaged payments on the basis of GST returns submitted by the companies. However, the ministry of food security had added verification of sales by the provinces, against the spirit of their own notification.
While the capacity of provinces was highly questionable, KPK and Sindh did not display the will to support initiative of the federal government. This led to highly sluggish processing of claims by food security ministry, which itself was not equipped with wherewithal to handle the subsidy disbursement in this complex manner.
Earlier in 2005 and 2008, this ministry had been making payments on the basis of audited financial statements of the Companies.
This time in spite of submitting indemnity bonds by the companies, the officials are not feeling confident to make payments because of unknown fears, notwithstanding their decision-making capacity.
This crisis has escalated because an unnecessarily complex verification procedure has been adopted for the payment of the fertilizer subsidy. Hence, the backlog of unpaid and overdue subsidy amounts has now risen to over 20 billion Rupees. The ‘Ministry of Finance’ and the ‘Ministry of Food Security’ both seem to disown the subsidy program announced by the government.
