The government has proposed drastic measures including concessions of taxes and duties, reduction in prices of fertilizers and concessional electricity tariffs for agricultural tube-wells.
“Never in the past such a comprehensive package was announced for revival of the agricultural sectors and for benefit of the grower’s community,” Finance Minister Ishaq Dar in his budget speech on floor of National Assembly said.
The minister said the per bag price of Urea fertilizers would be reduced from existing Rs 1,750 to Rs 1,400. The federal and provincial government will pay the cost of the subsidy, which will be Rs 36 billion, in equal shares.
Similarly, the price of DAP is also being reduced from existing Rs 2,750 to Rs 2,500. The federal and provincial government will pay the cost of the subsidy which will be Rs 10 billion in equal shares.
The budget speech shows that the volume of agriculture credit target is being increased from Rs 600 billion to Rs 700 billion.
The government has also proposed reduction of cost of credit as the State Bank of Pakistan has developed a framework to reduce mark-up of ZTBI, NBP, Bank of Punjab and Punjab Cooperative by 2 percent.
The government has also proposed reduction in electricity tariff for agriculture tube wells from Rs 8.85 per unit to Rs 5.35 per unit. For this purpose, the government will bear expenses of around Rs 27 billion.
Finance minister also announced concession of customs duty for dairy, livestock and poultry.
The rate of 5 percent for import of machinery for the dairy, livestock and poultry sections is proposed to be reduced to 2 percent, incubators and brooders and machinery for animal feed stuffs presently subject 5 percent customs duty in tariff is proposed to be reduced to 2 percent and concessions of customs duty for fish farming.
To promote fish farming, customs duty on impost of fish feed pellet machines and water-aerators is being reduces from 5 percent to 2 percent. Fish feed is subject to 10 percent customs duty whereas shrimp feed is at 20 percent and now duty on import of fish and shrimp feed is proposed to be exempted.
The tax and duty concessions amounting Rs 15 billion announced in Budget 2015-2016 will continue in 2016-2017.