The government on Thursday approved Rs60 billion additional funds to carry out Operation Azm-e-Istehkam and would immediately release Rs20 billion, which the military has sought to equip security forces fighting against militants in two provinces.

The Economic Coordination Committee (ECC) of the cabinet approved Rs20 billion as a special allocation for Operation Azm-e-Istehkam during the current fiscal year 2024-25, according to an official announcement by the Ministry of Finance. An official of the ministry said that the remaining nearly Rs40 billion will be disbursed during the second half of the fiscal year and will be utilized for procurement of advanced military gadgets.

Headed by Finance Minister Muhammad Aurangzeb, the ECC also allowed the export of additional 100,000 metric tons of sugar, bringing the total export quantity to 250,000 on the watch of Prime Minister Shehbaz Sharif. The ECC also delinked the export from maintaining the local prices at Rs140 per kg, giving an unwarranted room to sugar millers to earn not only from the export proceeds but also from the local market by increasing the prices.

Operation Azm-e-Istehkam

The ECC was told that in light of the June 2024 decision of the Federal Apex Committee to launch the new military operation, the military has sought Rs60 billion in additional funds. The money is over and above the regular military budget and the government will issue an additional supplementary grant to the tune of Rs60 billion.

The government will immediately disburse the Rs20 billion while the remaining amount would be made available against the procurements.

Pakistan is passing through a difficult security phase and its forces are fighting with terrorists in Khyber-Pakhtunkhwa and Balochistan to flush out terrorism.

An official of the ECC said that the terrorists had access to better technology and weapons that were left behind by running US forces. In order to tackle this challenge, the military needed new hardware to fight the menace of terrorism. The government has immediately given Rs20 billion for capacity enhancement and the remaining Rs40 billion funds would be released as per the need.

Sugar export

The ECC approved the summary of the Ministry of Industries regarding the export of further 100,000 metric tons of sugar, according to the Finance Ministry. The ECC had already allowed the export of 150,000 tons of sugar and gave the fresh approval by ignoring the violation of its previous decision.

At the time of the approval of the 150,000 tons of sugar, the ECC had decided that in case the local price increased above Rs140 per kg, it would cancel the export permission. The prices have already touched Rs150 per kg and yet the ECC gave the fresh permission.

“The benchmark for Retail Price of sugar may be delinked from the permission to export sugar as retail price is not directly under the control of sugar mills”, according to the ECC decision.

The ECC further decided that the condition of revoking of export quota in case of non-payment of dues of the growers from proceeds of export of sugar shall be applicable only to the non-compliant mills rather than Pakistan Sugar Mills Association as a whole.

The ECC’s decision suggests that the government of Prime Minister Shehbaz Sharif is also hostage to the elite capture. Instead of penalizing the violation of its decision, the ECC withdrew the decision to link export with maintaining local prices.

The ECC also decided that in view of procedural delays encountered during export of sugar, the period allowed for export of sugar from the date of allocation of quota by respective Cane Commissioner shall be extended from 45 days to 60 days.

Moreover, export proceeds shall be received in advance in case of Afghanistan only through banking channel however; export proceeds in case of letter of credit may be allowed within a period of 60 days of opening of LC for export of sugar to other destinations;

The ECC also decided to monitor the market situation on a monthly basis and review its decision as per emerging needs, and instructed the Sugar Advisory Board to develop a comprehensive sugar policy within two months to address the sector’s challenges and ensure sustainable growth.

However, all such decisions are proven just rhetoric and the millers have always proven themselves more powerful than any government.

The ECC also approved Rs276.3 million in favor of the Ministry of Interior as supplementary grant. It approved another Rs2 billion supplementary grant on account of payment of security charges of Reko Diq Project to Frontier Corps Balochistan.