By Asad Cheema
ISLAMABAD: The Pakistan Economy Watch (PEW) on Sunday hailed the decision of government to curtail its role in wheat procurement to allow the private sector to play a bigger role. The World Bank has suggested reducing public sector role in wheat procurement to maintaining strategic reserves which has prompted to reduce procurement target from 4.2 million tonnes to 3.5 million tonnes which is a step in the right direction, it said.
In a statement issued here, President PEW Dr. Murtaza Mughal said that the government has planned to reduce annual grain procurement to one million tonnes and leave rest to the private sector which will stabilize prices, improve supply and reduce the financial burden on the exchequer.
He said that the government is also working on a project to provide targeted subsidy to the poor in case of hike in flour prices which is a laudable decision.
The President PEW said that the involvement of the government departments in wheat procurement have a negative effect on the overall situation as food sector circular debt has risen to Rs560 billion which is equal to Annual Development Programme.
The debt was Rs 36.9 billion in 2002, it jumped to Rs400 billion by the end of last financial year and Rs160 billion has been added to the debt afterward, he said.
The food department is also planning to issue Sukuk bonds to retire debt but it needs fine tuning for better results.
Dr. Murtaza Mughal noted that authorities continue to face the challenge of bringing down the prices of wheat flour in the country that is skyrocketing despite the import of the commodity which has necessitated an improved role for the private sector.