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The Ministry of Finance in Pakistan has recently raised concerns over the cash credit limit requested by the Pakistan Agricultural Storage and Services Corporation (PASSCO). According to reports, the Finance Ministry believes that PASSCO’s funding request exceeds the actual expenses incurred in procuring wheat from farmers, leading to a need for clarification from the Ministry of National Food Security and Research.
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Recently, the Economic Coordination Committee (ECC) approved the Food Ministry’s proposal, granting PASSCO a cash credit limit of Rs. 169 billion. However, concerns arise as this approval comes with a wheat procurement target based on a price of Rs. 3,900 per 40 kg, which is approximately Rs. 33 billion more than necessary.
In addition to the concerns raised by the Finance Ministry, there is also dissatisfaction in Islamabad regarding the disparity in support prices set by different provinces. While specific procurement targets and cash credit limits have been assigned to provinces like Sindh and Balochistan, the variations in support prices pose challenges to uniformity and fairness in the wheat procurement process.
Moreover, incidental charges totaling Rs. 2 billion are anticipated to be covered by the respective provincial governments, adding to the complexities of the funding arrangement.
In summary, the concerns raised by the Ministry of Finance shed light on the need for transparency and efficiency in managing the cash credit limit for PASSCO. Addressing these concerns and ensuring fair pricing across provinces will be crucial for effective wheat procurement and agricultural support in Pakistan.