Commerce Ministry has reportedly compelled the Economic Co-ordination Committee (ECC) of the Cabinet to review its decision on allocation of funds for the export of sugar as inland freight subsidy. Sugar millers protested on non-release of subsidy meant to facilitate exports. Official documents available with Business Recorder reveal that the ECC in its meeting on March 06, 2013 approved inland freight subsidy of Rs 1.75 per kilogram of sugar to exports of a total quantity of 1.2 million MT of the commodity.
The ECC of the Cabinet further decided that since the said initiative was an incentive for the exports, therefore, Finance Division should provide funds out of the head of Export Development Fund (EFD). According to documents, Finance Division was accordingly requested to provide Rs 2.1 billion out of EDF. It released Rs 1 billion on May 09, 2013 for EDF. However, the Board of Administrators of EDF did not support the proposition contending that the provision of inland freight subsidy for export of sugar was not a valid charge upon EDF, as per the EDF Act.
Meanwhile, ECC of the Cabinet in its meeting on September 07, 2013, allowed export of an additional quantity of 500,000 MT of sugar and decided to grant an inland freight subsidy of Rs 1.00 per kilogram on export of the said quantity. However, Finance Division while regretting its inability to support provision of funds to TDAP stated that allocation of funds for inland freight subsidy would be met out of the head of EDF.
It was proposed that in view of the stance adopted by the EDF Board and the fact that the sugar mills were pressing hard for payment of inland freight subsidy on export of sugar in compliance with the decisions of the ECC of the Cabinet, the decision regarding provision of funds out of EDF for “inland freight subsidy for export of sugar” be reviewed and Finance Division be advised to provide total amount of Rs 2.6 billion (Rs 2.1 billion + Rs 0.5 billion) to the TDAP, Commerce Division; while the previous amount of Rs 1 billion be surrendered to Finance Division and 50% of Rs 2.6 billion should be released immediately.
After a detailed discussion, the ECC decided that the Finance Division would provide total amount of Rs 2.6 billion (Rs 2.1 billion +Rs 0.5 billion) to the TDAP, Commerce Division, while the previous amount of Rs 1 billion should be surrendered to Finance Division and 50% of Rs 2.6 billion shall be released immediately.