Islamabad - The Economic Coordination Committee (ECC) of the Cabinet on Thursday approved to compensate farmers of basmati rice @ Rs5000 per acre for which federal as well as provincial governments would provide Rs10 billion subsidy.

The ECC, which was chaired by Finance Minister Senator Ishaq Dar, has approved the summary of Ministry of National Food Security and Research of giving compensation to the rice farmers. Prime Minister Nawaz Sharif already approved the proposal.

The top economic decisions making body of the country, the ECC approved the compensation to the farmers of basmati rice @ 5000 per acre subject to the following provisions: total amount of compensation may be shared equally among Federal and provincial governments. The total amount of subsidy will be around Rs.10 billion. The compensation will be made to the small growers of 25 acres only. The farmers who have already received compensation against crop damage in recent floods in Punjab will not be eligible to this additional compensation.

Meanwhile, the Committee also considered and approved the proposal moved by the Ministry of Water and Power for allowing extension of subsidy to the agriculture consumers @Rs10.35 per unit till 30.6.2015. According to the earlier decision, Ministers of W&P and Finance had decided in a meeting with the representatives of Kissan Ittehad (in August 2013) to subsidise tariff for the agriculture consumers whereby the Federal Govt. bore the tariff differential subsidy and provincial governments were directed to pay the GST. In today’s decision it was also decided that the GST will be adjusted against the electricity fee payable to the provinces. It is also important to mention that during peak hours agri- tube wells will not be entitled for power supply.

The Federal Minister for Finance said that the amount paid in subsidy will be around Rs22 billion which was around Rs18.5 billion last year but the Federal Government has taken the decision to support farmers as with the help of this decision Punjab has given historic crop of wheat production 19.470 million ton during 2013-14, the Fuel Price adjustment will also be paid by the federal government, added the Minister.

The ECC also considered and approved the policy guidelines under section 21 of the Ogra Ordinance 2002. According to the guidelines, Volume pilfered by non-consumers but detected and determined by the companies in accordance with Ogra procedure as provided in rule 30 of Natural Gas Licencing Rules 2002.

Till the finalisation of the new tariff regime by Ogra, the income from non-core activities (LPS, Meter Manufacturing plant, Royalty from JJVL and sale of condensate/LPG may also be provisionally treated as non-operating income. The provision of doubtful debts may be determined at the minimum of 1pc of the sales in line with the prevailing accounting practices.

The chair and the participants of the meeting however did not agree to the idea of “volume against minimum billing amount charged to domestic consumers”. The chair emphatically ordered all the relevant ministries and authorities to discuss the proposals in advance and suggest mutually accepted and well prepared plans to be accepted by the esteemed forum as this place is not the place for debate on minor details.

The chairman also acknowledged and appreciated the services of Ms. Rukhsana Shah, federal Secretary of Textile Industry in preparing the Textile Policy 2014-19, but gave the Ministry one month’s period to review and scrutinise it in detail as suggested by Minister for Planning.

The ECC also approved the proposal of Ministry of P&NR to allocate around 110MMCFD of gas produced in KP to Khaber Pakhtunkhwa  for power generation with the condition that the gas will be given to PPIB available to KP only after following the appropriate procedures laid down in rules and regulations of the PPIB.