Centre asks GB to rationalise wheat price.

ISLAMABAD -- Amid criticism over the distribution of free wheat flour in Punjab and Khyber Pakhtunkhwa, the federal government has called upon the Gilgit-Baltistan administration to urgently rationalise the cost of subsidised wheat for citizens in a phased, targeted manner and charge the affluent people market rates to ensure a sustainable supply.

The GB's elected government has recently made a commitment to increase flour prices, which are more than ten times lower in the mountainous region than those in the rest of the country.

About Rs8 billion wheat subsidy earmarked for Gilgit-Baltistan in this year's federal budget has already been exhausted against the supply of about 90,000 tonnes early this year, as prices went up amid expensive imports.

The finance ministry has been critical of the huge price gap and rising subsidy account amid fiscal reviews with the International Monetary Fund. The ministry has been trying to either clip or contain subsidies while the political government tends to appease the population ahead of general elections.

Region has already exhausted its Rs8bn annual subsidy as flour sells for Rs12.5 per kg

The finance ministry last week conceded at a meeting of the Economic Coordination Committee (ECC) of the cabinet to provide Rs2.9bn additional subsidy to cover the supply cost of 25,000 tonnes to Gilgit-Baltistan for only two months - March and April - to avoid any difficulties to the region's people during Ramazan because of supply shortages.

The committee, however, set a condition that the GB government and the Ministry of Kashmir Affairs and Gilgit-Baltistan must reach a consensus on rationalising wheat prices within a month.

Wheat supply to GB on subsidised rates has been going on since the 1970s. This was necessitated due to exorbitant prices of wheat flour in the area as the staple was sparsely cultivated in the region and transportation was too costly due to underdeveloped infrastructure.

However, the difference between the prices of GB's subsidised wheat and the unsubsidised one sold in the rest of the country has substantially widened over time, as the flour sale price in Gilgit-Baltistan has not been enhanced for quite some time.

A record seen by Dawn shows that flour currently sells for Rs12.5 per kg in Gilgit-Baltistan against Rs140 or more across the country.

The federal government provides Gilgit-Baltistan with about 160,000 tonnes of wheat per year. With the purse in hand, the finance division gives...