By Staff Reporter
ISLAMABAD: The government agreed on Thursday to continue subsidising wheat for the people of Gilgit-Baltistan, a northern region bordering China, after weeks of protests over a sharp increase in the price of the staple food.
The decision was announced by the Economic Coordination Committee (ECC) of the Cabinet, a body that oversees economic policy, which met under the chairmanship of caretaker Finance Minister Dr Shamshad Akhtar.
The ECC approved a comprehensive plan for the price rationalization of subsidized wheat in Gilgit-Baltistan, which involved slashing the budgets of some major ministries to comply with the strict conditions of the International Monetary Fund (IMF) on subsidies.
According to a government statement, the ECC approved it with the direction to the Ministry of Finance and the Ministry of Kashmir Affairs and Gilgit-Baltistan to work out the modalities.
The statement said that the summary regarding the plan was debated in the presence of the Chief Minister of Gilgit-Baltistan.
The finance ministry explained that it could not extend the subsidy out of budget due to the IMF conditions. The only option was to make technical supplementary grants by diverting funds from other ministries that have large part portfolios.
The withdrawal of the full subsidy would have meant an additional burden of more than Rs10 billion on the Gilgit-Baltistan government, which relies on federal financing to run its affairs.
The people of Gilgit-Baltistan, which is not officially part of Pakistan but is administered by it as part of the territory of Kashmir, have been protesting since December when the regional government raised the price of wheat from about Rs20 per kilogram to Rs36.
The price hike was part of a gradual adjustment to bring the wheat price in line with the rest of the country, where it is about Rs52 per kilogram.
The government had agreed to phase out the subsidy, which costs about Rs10 billion a year, as part of its agreement with the IMF under a $3 billion loan package agreed last year.
The sudden increase in the prices sparked widespread resentment and demonstrations in Gilgit-Baltistan, where poverty, unemployment, and food insecurity are high.
Gilgit-Baltistan, which is Pakistan’s only land link to China and lies at the heart of the $65 billion China-Pakistan Economic Corridor (CPEC), has only 1 percent of its land used for agriculture. The rest of the nearly 72,000 square kilometers of administrative territory consists of 52 percent rangelands, and four percent forests, while the remaining portion has mountains and barren land.
The protesters, led by the Awami Action Committee, an alliance of regional, political, and religious parties, as well as civil society, social welfare organizations, and rights bodies, demanded the restoration of the full subsidy, which was introduced in the 1970s by former prime minister Zulfikar Ali Bhutto to support the region’s high poverty index, lack of industry and insignificant agricultural land.
The region has long been facing a shortage of wheat, while a weakened rupee and sky-high inflation increased wheat prices across Pakistan, which also forced Islamabad to reduce the regional wheat quota to 1.2 million wheat bags from 1.7 million a year.
The regional government on Thursday also agreed to increase the wheat quota from 1,100,000 bags to 1,600,000 bags to effectively cater to the needs of the region’s people. An order issued said that one kilogram of wheat will now be available for Rs22 and each person will receive 7.315 kilograms of wheat instead of three kilograms.
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