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October 28, 2020

Govt’s incompetence costs Rs404b to people, country

Top Story

 
October 28, 2020

KARACHI: Despite the government’s claim to have focussed on sugar and wheat, both edibles have so far been most vulnerable, causing an estimated Rs404 billion loss to the people.

The recent research conducted by the Geo News programme Aaj Shahzeb Khanzada Ke Sath, shows that not complying with the government’s policies, the sugar price surged and caused a dent of Rs184 billion to the people, while due to unnecessary reluctance to take decision, the wheat price went up and caused Rs220 billion dent to the people. The research revealed that the wheat crisis surfaced due to delayed decisions as the flour prices are at its top level in the country.

It is pertinent to mention that the government had four vital chances to control the prices through banning wheat export, so later it did not have to buy expensive imported wheat. The first, when the government was informed that the wheat crops could not meet the target. The second in May, when the procurement could not be done according to the requirements, the third was in June, when the government had decided to import wheat but it did not issue a notification of the judgment. The fourth in July when the government had decided to give tax concession on imported wheat but the edible was not imported, causing serious surge in the wheat prices. The price hike excessively burdened the people to the tune of Rs205 billion. The research report revealed that the annual consumption of wheat was 124 kilograms per capita, the monthly consumption was 10kg per capita, while the total population of the country was 220 million.

The researchers said according to data, the price of one kg wheat was Rs39.25 in October 2018 that reached Rs46.25 per kg in October 2019, showing an increase of Rs7 per kg. It said the people had to pay an excess amount of Rs16 billion in last October. Similarly, in November 2018, the flour price was Rs39.25 per kg that went up in last November up to Rs45.65 per kg, showing an increase of Rs6.40, while the people had to pay an excess amount of Rs14.5 billion.

And in December 2018, the flour price was Rs39.03 per kg, which went to Rs45.04 per kg, showing an increase of Rs6 per kg, while the people had to pay an excess amount of Rs14 billion. In January 2019, the flour price was Rs39.40 per kg that reached in January 2020 Rs48.40, showing an increase of Rs9 per kg, while the people had to pay an excess amount of Rs20 billion. In February 2019, the flour price was Rs39.50 per kg that reached in February 2020, Rs45.50 showing an increase of Rs6 per kg, while the people had to pay an excess amount of Rs14 billion.

In March 2019, the flour price was Rs39.50 per kg that reached in March 2020 Rs45 showing an increase of Rs5 per kg, while the people had to pay an excess amount of Rs11 billion. In April 2019, the flour price was Rs38.60 per kg that reached in April 2020, Rs44.20 showing an increase of Rs5.60 per kg, while the people had to pay an excess amount of Rs12 billion. In May 2019, the flour price was Rs39.25 per kg that reached in May 2020 Rs44.25, showing an increase of Rs5 per kg, while the people had to pay an excess amount of Rs11 billion.

In June 2019, the flour price was Rs40 per kg that reached in June 2020, Rs51 showing an increase of Rs11 per kg, causing the people to pay an excess amount of Rs25 billion. In July 2019, the flour price was Rs42 per kg that reached in July 2020, Rs51 showing an increase of Rs9 per kg, as a result the people had to pay an excess amount of Rs20 billion. In August 2019, the flour price went down to Rs42 per kg that reached in August 2020 Rs50.50, showing an increase of Rs8.50 per kg, while the people had to pay an excess amount of Rs19 billion.

In September 2019, the flour price was Rs43.30 per kg that reached in September 2020, Rs50.45 showing an increase of Rs7.15 per kg, while the people had to pay an excess amount of Rs16 billion. Similarly in October 2019, the flour price was Rs46 per kg that reached in October 2020, Rs52 showing an increase of Rs6 per kg, while the people had to pay an excess amount of Rs13 billion. The research report said the people had paid an excess amount of Rs205 billion for flour in one year till the last October.

On the other hand, the government claimed it is importing 1.5 million tons wheat to cope with the crisis but the news went viral in the international market that Pakistan had been facing a serious wheat crisis and the government wanted to import at least 3 million tonnes wheat from international market. The news caused wheat price hike in international market that went up from USD230 to USD280. Meanwhile, Pakistan had been importing wheat at the rate of USD292 because of the volume of the order.

The research report said the government had to pay an excess amount of USD62 per ton. It was understood in April that the wheat crops could not meet the target but the government did not pay attention. It said if the government would start importing wheat in small quantity from April, then it would not cause panic in the international market and the government could save a hefty amount of foreign exchange like Egypt and Jordan. It also pointed out that if the government would have taken the decision timely, then it may have been buying wheat at USD220 to USD230, while the government is currently buying wheat at the rate of USD292 per ton.

It is pertinent to mention that Pakistan had exported wheat at the rate of USD210, while in the current fiscal year, Pakistan had been importing wheat at USD280. Pakistan had already paid USD50 million excess that is costing the national exchequer Rs9 billion due to delayed decision. It said the government had to give subsidy to maintain the wheat prices as it pledged to provide wheat at the rate of Rs840 per 20kg wheat bag, but in the current buying it caused Rs920 per 20kg wheat bag. The current data showed that the government had to pay a minimum of Rs80 per 20kg wheat bag as subsidy to bring the prices back to the government’s prices.

The research said the subsidy of Rs4 per kg on 1.5 million tons wheat meant that the government had to pay Rs6 billion from the national exchequer, while Rs205 billion loss due to surge in prices was a separate thing, while the collective loss was

Rs220 billion. It said the Sugar Commission’s report stated that the production of the sugarcane could not meet the need.