Nepal | July 16, 2019

House panel discusses STC’s woes

Himalayan News Service

Kathmandu, February 8

A parliamentary sub-committee on Commerce, Industries and Consumer Welfare Relation today directed the government to either allow Salt Trading Corporation (STC) to hike price of iodised salt or subsidise the loss STC is incurring in salt business.

Citing a loss of more than four rupees per kilogram on sale of iodised salt at present due to increased purchasing cost, STC has been urging Ministry of Supplies (MoS) to raise price of iodised salt. As per STC officials, the corporation is facing an average loss of over Rs 200 million annually since three years. STC has projected the loss in salt business would balloon to Rs 260 million this fiscal.

Currently, STC sells one kilo of iodised salt at Rs 16 to traders and it is retailed at Rs 18 in the domestic market.

“Though STC has a history of being a financially sound government agency, the current loss that the corporation is bearing on salt is adding to its financial woes. To ensure sustenance of STC, price of iodised salt has to be adjusted — either by increasing its price or subsidising STC for the loss,” Subash Chandra Thakuri, coordinator of the sub-committee, said. However, Thakuri added that the government should give priority to subsidising STC as the price hike will directly hit consumers.

General Manager of STC, Urmila Shrestha, had informed that STC incurred a loss of Rs 250 million in salt business last fiscal and is likely to bear Rs 260 million loss this year due to high purchasing cost. Nepal imports around 160,000 tonnes of iodised salt from Gujarat of India every year.

The committee also directed MoS to make necessary amendments in law and allow STC’s board to adjust price of iodised salt. As per the current law, Monitoring and High-Level Price Fixation Committee of the government is responsible to fix price of iodised salt.

Similarly, the committee also directed MoS to coordinate with other government agencies and ensure that STC is compensated the amount it invested in purchasing zinc sheets and tarpaulins during the devastating quakes of 2015. As per STC, it has a stock of tarpaulins and zinc sheets worth Rs 350 million that the government had directed it to purchase to support temporary settlement of the affected households. However, Shrestha said the government has neither issued the budget used for the purchase, nor has it done anything to sell the zinc sheets and tarpaulins in the market. Hence, a huge budget of STC has been frozen.

Likewise, the sub-committee also directed MoS to coordinate with Ministry of Finance (MoF) and ensure that STC gets its compensatory budget of almost Rs 35 million to make up for the loss incurred while running fair price outlets during the festive season in past years.

However, Supplies Secretary Prem Kumar Rai said that though MoF expresses commitment to subsidise STC for sales of basic food items at discounted rates during festivals, MoF is often reluctant to release the funds afterwards. In this regard, the sub-committee said today that it will call a meeting with officials of MoF and MoS soon.

 


A version of this article appears in print on February 09, 2017 of The Himalayan Times.


Follow The Himalayan Times on Twitter and Facebook

Recommended Stories: