A National Assembly panel on Wednesday unanimously approved a resolution, asking the ‘pro-industry’ government to end discrimination against the agriculture sector and bring down its borrowing cost close to the industry level.
The National Assembly Standing Committee on Finance and Revenue also decided to write a letter to the anti-graft watchdog chairman over the delay in filing a corruption reference against National Bank of Pakistan’s (NBP) former and current top officials, who were allegedly involved in a Rs18.5-billion credit scam.
‘Pakistan lags far behind in agriculture’
Committee members unanimously requested the National Accountability Bureau (NAB) chairman to put his signature on a reference awaiting approval since September 2016, which may eventually seal the fate of half a dozen top bank executives.
The National Assembly members came down hard on the government for ignoring the agriculture sector that had been brought to its knees in the past three and a half years due to adverse policies and plunge in commodity prices in the global market.
They approved a resolution, asking the federal government to bring down interest rates on agriculture loans, which currently ranged from 13.8% to 18%, to single digit.
Contrary to that, the industrial sector was borrowing in the range of 6.5% to 7.5%, according to the committee members.
“What kind of government is this that is extending loans to the agriculture sector at 13.8% when key policy rate of the State Bank of Pakistan (SBP) is just 5.75%,” asked Rana Mohammad Hayat of the Pakistan Muslim League-Nawaz (PML-N), an MNA from Kasur. If the cost of borrowing was not brought down, the committee members would lodge protest against the government and banks, he cautioned.
Zarai Taraqiati Bank Limited (ZTBL) was compelled to give agriculture loans at 14% interest due to its high cost of capital, revealed Syed Talat Mahmood, the bank’s president.
He said the SBP had given Rs56 billion in loans to ZTBL at 7.5% and in addition to that the bank’s administrative cost stood at almost 5%.
“ZTBL was subsidising the finance ministry by charging higher interest from the farmers,” claimed Pakistan Tehreek-e-Insaf’s MNA Asad Umar.
Rana, Shahbaz. Farmers borrow at ‘much higher rates than industrialists’. The Express Tribune, March 17, 2017.