Govt to intervene in market to reduce food prices: Tarin
ISLAMABAD: At a time when inflation is hitting all segments of society, Finance Minister Shaukat Tarin says the government has decided to intervene in the market to partially reduce prices of essential food items, including sugar, flour and pulses.
The interventions in the market will be in three forms — Utility Stores, open market interventions and targeted subsidies to weak segments of society. “We have allocated more than Rs100 billion for targeted subsidy for 12.5 million households,” Mr Tarin said.
Talking to Dawn, the minister said that the support package would be approved in the cabinet meeting on Tuesday to be chaired by Prime Minister Imran Khan. He said the Economic Coordination Committee of the cabinet had already approved the package.
As part of the package, the government has decided to reduce sales tax on edible oil/ghee to give immediate relief to consumers. “We have estimated that reduction in sales tax rate will translate into the decrease of Rs50 per litre in the prices of edible oil/ghee,” Mr Tarin said.
Sales tax on edible oil, ghee to be slashed to give relief to consumers
This benefit would be available to all segments of society in the open market, he added.
Pakistan Vanaspati Manufacturer Association chairman Abdul Waheed told Dawn that the association would transfer the benefit of reduction in sales tax rate to consumers immediately. However, he said the government had not shared any proposals with the association so far.
The minister said the government would also intervene in the open market to reduce the price of 20kg flour sack by Rs100 to Rs150. He said this facility would be available to all consumers in the open market.
Under the second plan, the minister said the government would continue to subsidise food items at the Utility Stores across the country. The subsidy at the stores will continue on sugar, ghee, oil, pulses and flour.
The government has already fed data of 12.5 million households into the electronic system of Utility Stores. While using their fingerprints at the Utility Store counter people from weak segments of society can avail the facility of targeted subsidy.
Mr Tarin said the government would utilise more than Rs100bn for giving targeted subsidy to 12.5m households on essential food items, including, sugar, flour, pulses and ghee.
He said that prices of food items and energy had risen to new heights all over the world. He said crude price had reached $78 per barrel against $40 of last year.
Asked about bringing retailers into tax net, the minister said that recent tax ordinance was promulgated to bring non-registered retailers into the tax net.
The retailers have threatened to go on strike against the government’s measures to bring them into tax net.
The minister said the government would not compromise on documentation of economy even if traders went on strike.
On the agriculture side, he said in medium to long term, commodity warehouses, cold storages and agri malls would be established with the aim to eliminate the role of middle man and ensure that farmers get due price of their products. He said strategic reserves of major commodities were also being built to ensure smooth supplies to the market.
The minister reiterated that sugar price had increased by 40 per cent in the international market but the government had increased it only by 11pc. Similarly, palm oil price saw an increase of 50pc in international market but a raise of 33-35pc in local market, he added.
Mr Tarin said there had been an increase in prices of energy, food and metals from 34pc to 129pc in the world, which had made an impact on the prices in Pakistan.