ISLAMABAD, Pakistan: In order to give further boost to agriculture sector, the federal government in Federal Budget 2017-18 has proposed a number of new supportive initiatives.
The government would launch a scheme in collaboration with Zarari Taraqiatie Bank limited (ZTBL) and National Bank of Pakistan for small farmers with holdings of 12.5 percent.
The small land holders would be provided agricultural loans at a reduced rate of 9.9 percent per annum.
Besides, small loan of up to Rs 50,000 per farmer will be provided, whereas two million loans would be provided by ZTBL, National Bank of Pakistan (NBP) and other banks.
In order to facilitate the farmers, the volume of agriculture credit has been enhanced to Rs 1,001 billion from the last year’s target of Rs 700 billion which will be an increase of 43 percent.
As a further measure to support farmers, the government has already decided to sell the existing stock of imported Urea fertilizer available with NFML at a concessional Rs 1,000 per bag.
In order to create ease of disbursement of subsidy on DAP, it has been decided that DAP will be subject to fixed sales tax. As a result, General Sales Tax (GST) is being reduced from Rs 400 to Rs 100. This will have a subsidy impact of Rs 13.8 billion.
Through reduction in tax rates and subsidy the price of per bag of Urea shall be maintained up to Rs 1,400 per bag in the FY 2017-18.
The government would continue provision of subsidized tariff on agri-tube wells at the rate of Rs 5.35 per unit in FY 2017 to provide cheap electricity for agri-tube wells and was estimated to cost around Rs 27 billion in FY 2017-18.
The government has also proposed several tax relief measures for agriculture sector and reduced the duty on the import of agriculture sector.
It has been decided to reduce the customs duty and sales tax at import stage to 0 percent 5 years on new and up to 5 years old combined harvesters machinery.
The GST on imported sunflower and canola hybrid seeds was being removed whereas reduction of sales tax rate on imported machinery for poultry sales tax rate reduced from 17 percent to 7 percent on certain imported machinery for poultry.
The sales tax on import and local supply of agricultural diesel engines between 3 to 36 Horse Power for tube-wells currently having rate of 17 percent is proposed to be exempted.
