Sugar probe commission critical of key govt functionaries' role in subsidy.

Byline: Syed Irfan Raza

ISLAMABAD -- The shocking sugar inquiry commission's report made public on Thursday was critical of the role of Planning and Development Minister Asad Umar, Adviser to the Prime Minister on Commerce and Industries Razak DawAood and Punjab Chief Minister Usman Buzdar on the issue of sugar export subsidy as they failed to satisfy the commission.

These three key government functionaries and former prime minister Shahid Khaqan Abbasi had appeared before the commission and recorded their statements on the issue of grant of sugar subsidy.

According to the report, Pakistan exported more than four million tonnes of sugar over the past five years and more than Rs29 billion had been given to sugar mills in terms of export subsidy. 'Exporting sugar with subsidy means that we are exporting on international rates which are lower than the cost of production claimed by sugar mills and the differential cost is being paid from the taxpayers' hard-earned money,' the report said.

The commission, which was formed to probe the recent sugar crisis in the country, observed that during 2017-18, Rs10.7 per kg subsidy was granted by the Economic Coordination Committee (ECC) of the cabinet only for export of two million tonnes of sugar (Sindh was granted additional subsidy of more than Rs4bn). A decrease of Re1 per kg of subsidy meant saving of more than Rs2bn. Even if observations of the Finance Division were to be ignored and only adjustments of Rs5.10 per kg considered, this would have saved more than Rs10bn. The major export subsidy was availed after January 2018. Therefore, timely intervention could have saved billions of rupees for the national exchequer.

Asad Umar

The report said Minister for Planning and Development Asad Umar (former finance minister) had informed the commission that the country was in dire need of foreign exchange at that time and since there were sufficient stocks of sugar available in the country, the decision to export the commodity was justified. He said the crushing season was about to start and, therefore, there was no apprehension of sugar shortage and that the increase in prices of sugar in 2019 could not be attributed to the shortage of sugar due to export as mentioned in an earlier report of the inquiry committee.

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