Governmet issues 10 percent fertilizer subsidy

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Islamabad: Secretary of Ministry of National Food Security & Research (MNFSR) has finally resumed the payment of fertilizer subsidy amounts that were pending since last year.

Over two billion rupees were recently released against the outstanding amounts of 20 Billion Rupees, payable to different fertilizer manufacturing companies.

These subsidy amounts have been excessively delayed over the past two years, thus the intervention of Prime Minister Office, the government had pledged to expedite the release of 80 percent of these amounts by July, 2017, while the remaining 20 percent amounts were to be paid by October 2017, after Third-Party validation. However, the subsidy amounts are still being released much slower than promised. Hence, only Rs.2 billion, which is just 10 percent of due amount has been paid till the end of October.

Since these delays have created big financial challenges for the urea producers, the authorities must respond more urgently to the woes of this essential industry – which is the biggest contributor to the national exchequer and ensures higher agricultural productivity. In spite of the financial hardships, the manufacturers have ensured supplies and controlled prices in spite of escalation in international prices. However, it must be realized that if this crisis is not resolved soon, most of the fertilizer enterprises will not be able to continue their participation as facilitators in the government’s subsidy-programme.

One major reason for the continued delays is the excessively-long process for verification of subsidy-claims. Despite clear instructions given by the Prime-Minister’s office, this tedious process have yet to be simplified, by relying primarily on GST returns. The process was further complicated due to the unnecessary involvement and resistance of three provincial governments.

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