High power tariff causing problems for the industrial and agriculture sector



Apr 28 - May 04, 2003




In fulfilment of his commitment to provide maximum incentive to the agriculture sector, Prime Minister Mir Zafarullah Khan Jamali has announced 33 per cent subsidy on electricity consumed by agricultural tubewells for the coming Kharif season. It will be equally shared by the Federal Provincial Governments concerned and the WAPDA.

The Prime Minister announced this decision while addressing the prize distribution of WAPDA, at WAPDA Auditorium in Lahore, for WAPDA sportsmen showing commendable performance in international hockey. Besides WAPDA officials, Punjab governor and Chief Minister and Federal Ministers also present on the occasion.

Earlier, Prime Minister received a briefing by WAPDA Chairman Lt. General (Retd.) Zulfiqar Ali Khan. The PM was introduced to the members of the authority and a host of WAPDA consultants engaged on various water sector projects including on going Ghazi Brotha hydropower project. The PM had detailed discussion with them specially on the issue of high power tariff which was agitating the public minds and how it could be reduced.

Talking to the mediamen on the occasion the Prime Minister agreed that the existing high power tariff was beyond the reach of common men as well as causing problems for the industrial and agriculture sector. He said that IPPs agreements had played havoc with WAPDA and practically crippled the authority financially. Without naming anyone, the Prime Minister said that some people in the past had signed these agreements for personal benefits despite opposition by WAPDA experts who warned them of the scenario well in time but their advised and warning was ignored by the then government in power for personal motives. These are international agreements from which the present government cannot backout. He however, assured the nation that the present government was very keen to bring down the tariff as much as possible and was examining all options available to government for achieving this objective. "We have already made beginning by first reducing the tariff by 12 paisa per unit for domestic consumers and now this incentive for the farming community", he said adding that the agriculture was the backbone of our economy and the government was determined to provide relief and incentives to promote its growth.



The Prime Minister's decision to allow 33 per cent subsidy on electricity consumed by agricultural tubewells for the coming Kharif season will be generally appreciated, but more so by agriculturists and farmers who have been the real victim of the high power tariffs. The Prime Minister has also assured cut in the fertilizers' prices before the Kharif season is yet another step that would help mitigate the problems considerably and result in reducing the input costs of farm production. In spite of consistent support for the industrial sector, the edifice of Pakistan economy remains largely agrarian and the growth of the agriculture sector has remained quite impressive for being in the limelight in the economic decision making process of the present government. It is generally believed that the poverty and lack of entitlements in a country like Pakistan can hardly be addressed unless the problems of the farm sector are properly tackled.

As still a predominant part of the population lives in villages, it is imperative that they be provided an opportunity to contribute in the production process through incentive and subsidies. It goes to the credit of the Prime Minister that he undertook such a bold decision to provide electricity and fertilizers at cheaper rate.

There are not two opinions that agriculture is the backbone of Pakistan's economy. About seventy per cent of the country's population living in rural areas is mostly associated with this sector. It is because of the hard work of the farmer that Pakistan today enjoys not only food security but is also able to produce food items in surplus quantity for export purposes. However, because of lack of proper attention by the successive governments, agriculture is no more considered to be profitable proposition. This is despite strong evidence that the developing countries that have achieved sustained economic growth are generally the countries in which the rate of agricultural growth exceeded population growth.

Even countries which followed as explicit development strategy based on industrialization will found very soon that without an expanding agriculture sector, the urban labour force would not be able to buy its food at reasonable prices, the supply of raw materials could not be assured for many industries and the bulk of the population living in rural areas would not have the purchasing power to buy goods produced by the industrial sector. Rapid agricultural growth, on the other hand, can stimulate and sustain the pace of industrial growth, thus setting into motion a mutually reinforcing process of sustained economic growth.