ISLAMABAD: The finance minister announced on Friday a number of measures to revive the agricultural sector, including concession on electricity tariff for tube wells and reduction in fertiliser prices.
In his budget speech, Finance Minister Ishaq Dar said the government would bear expenses of about Rs27 billion for the special concession on electricity tariff. From July 1, the current off-peak rate of Rs8.55 per unit for agriculture tube wells would be reduced to Rs5.35.
He said tax and duty concessions announced in 2015-16 budget would continue during the next fiscal year. These concessions amount to Rs15bn and are expected to promote agriculture sector development
UREA FERTILISER: Effective July 1, the price of urea will be further reduced to Rs1,400 per bag. In the past few months, through the provision of gas to the fertiliser industry, the government reduced the prices of urea fertiliser from Rs2,050 to Rs1,800 per bag. Later on, consultations of the government with the fertiliser industry resulted in a further decrease of Rs50 per bag.
Elaborating, Mr Dar said that as was the past practice the federal and provincial governments would pay the cost of the Rs36bn subsidy in equal shares.
As far as diammonium phosphate (DAP) is concerned, the finance minister said the government has decided to cut the price of DAP to Rs2,500 per bag, and in this case, the federal and provincial governments would equally share the cost of the subsidy, which would be around Rs10bn.
AGRICULTURAL CREDIT: The volume of agriculture credit target would be increased to Rs700bn during 2016-17. Availability of credit facilities to farmers, especially small farmers, was one of the priorities of the government, he said, adding that the credit increased from Rs336bn to Rs600bn since the present government came into power.
CREDIT GUARANTEE SCHEME: Under this scheme the federal government is allocating Rs1bn during the next fiscal year. The federal government is sharing risk of non-payment of credit by small farmers by guaranteeing up to 50 per cent of the financing by participating financial institutions.
Through the State Bank of Pakistan, the federal government has developed a framework to reduce mark-up rates of Zarai Taraqiati Bank Ltd, the National bank of Pakistan, Bank of Punjab and Punjab Cooperative Bank by 2pc.
The finance minister announced concession of customs duty for dairy, livestock and poultry sectors to encourage further investment and development. It has been decided that the rate of 5pc for import of machinery for these sectors would be reduced to 2pc.
Incubators and brooders and machinery for animal feed presently subject to 5pc customs duty in tariff would be reduced to 2pc.
FISH FARMING: To promote fish farming, the government decided that customs duty on import of fish feed pellet machines and water-aerators would be reduced from 5pc to 2pc. The import of fish and shrimp feed has been exempted from customs duty.
Previously, fish feed was subject to 10pc customs duty and shrimp feed 20pc. Similarly, customs duty on live baby fish that was subject to 10pc duty is being removed.
For processing of food, customs duty on cool chain storage and in related capital goods would be exempt from customs duty. The 7pc sales tax on pesticides and its ingredients is being abolished.