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April 18, 2020

Sugar Commission obtains Punjab Finance Dept’s file on Rs3 bn sugar subsidy

Top Story

April 18, 2020

ISLAMABAD: The Sugar Commission, led by DG FIA Wajid Zia, has obtained from Punjab Finance Department the official file containing details of how Punjab Chief Minister Usman Buzdar got sugar subsidy of Rs 3 billion approved.

However, the Commission has not yet interviewed the Punjab chief minister and other officials concerned for their statements on the handling of the subsidy issue, which raised serious questions.

Usman Buzdar was recently interviewed by the FIA Inquiry Committee on the issue of wheat and flour crises but sources close to the Chief Minister said that he has not been approached as yet for his statement on matter of sugar subsidy.

The FIA Committee on wheat/flour scam has reflected badly on the Punjab chief minister, who made repeated changes like never before in the Food Department leading to the recent crisis, but the FIA did not recommend any action against Buzdar. The FIA’s wheat report containing three parts- was conclusive. But in the case of sugar crisis, the FIA report on sugar led to the constitution of a commission headed by Wajid Zia for a detailed probe into the matter. The government has indicated that on the basis of Sugar Commission report, to be submitted on April 25, criminal and departmental action will be taken against those found involved in any wrongdoing.

The FIA report on wheat spoke negatively about Chief Minister Buzdar besides holding all three food ministers of Centre, Punjab and KP and some bureaucrats responsible for the crisis but the government has not yet proceeded against anyone. The only exception was the food secretary, who was made OSD by the prime minister. On the issue of sugar subsidy, The News recently uncovered the dubious manner adopted by the Punjab government to allow Rs3 billion subsidy to sugar industry.

It was such a hasty affair for the Punjab chief minister that two days after the ECC met in Islamabad and without even waiting for the ECC minutes, he following a verbal communication from Islamabad chaired a meeting and decided to give Rs3 billion subsidy to influential sugar industry.

Later, without waiting for the consultation process between provincial departments and ignoring even the all important finance department’s view, Buzdar took up the subsidy issue in the cabinet meeting on December 29, 2018 as a surprise ex-agenda item.

By doing this, the bureaucratic consultation processes as envisaged in the rules of business were crushed. To make the correction of the processes already trampled with, the Punjab Chief Minister had to give ex-post facto approval of his past actions.

The cabinet ministers were also in the dark as neither the Food Department’s summary seeking approval for the sugar subsidy was shared with them nor they were given the opportunity to see the view of the all important Finance Department on the matter.

The Finance Department had noted in the case file that subsidies are never a preferred option and are instead considered distortion for sound economic management especially when the impact or concrete translation of such initiatives to the welfare of the intended beneficiaries is not clear. Therefore, such economic distortions need to be discouraged in principle. This summary, containing Finance Department view was not allowed to be presented before the cabinet, which was instead used as a rubber stamp to approve sugar subsidy.