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Saturday December 21, 2024

ECC okays summaries for urea subsidy, PM youth loan, SIFC supplementary grant

Forum approves creation of pension fund through Non-Banking Finance Company (NBFC) regulated by SECP

By Mehtab Haider
December 19, 2024
Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, chairs the meeting of the Economic Coordination Committee (ECC) at the Finance Division in Islamabad on December 18, 2024.— PID
Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, chairs the meeting of the Economic Coordination Committee (ECC) at the Finance Division in Islamabad on December 18, 2024.— PID 

ISLAMABAD: The Economic Coordination Committee of the Cabinet has approved 16 summaries including sharing the cost of subsidy on imported urea on basis of 50:50 percent, Prime Minister Youth Loan Scheme and technical supplementary grant of SIFC.

The ECC approved the creation of a pension fund through a Non-Banking Finance Company (NBFC) regulated by the SECP. Rs30 million was authorised as seed money for the NBFC, with Rs1 million approved to meet incorporation expenses.

The ECC apparoved inclusion of tier 4 in the Cabinet-approved portfolio of the PM’s Youth Business and Agriculture Loan Scheme (PMYBALS). Under tier 4, all loans will be term loans only, with an end-user rate of 0% on a first-loss basis on the disbursed portfolio. The scheme has a budgetary allocation of Rs8.6 billion for the current fiscal year.

Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, chaired the Economic Coordination Committee (ECC) of the Cabinet meeting. The committee reviewed a summary submitted by the Ministry of Commerce regarding the sharing of subsidies on imported urea on a 50:50 basis. It approved the release of Rs10 billion to the ministry for immediate settlement of outstanding dues related to imported urea subsidies. The decision aims to alleviate the financial burden and ensure smooth and timely availability of urea to meet agricultural needs. The ECC further directed the provinces to fulfil their share of subsidy payments, emphasising equitable cost-sharing among all stakeholders.

The ECC approved a proposal regarding the establishment of the Siah Dik Copper Project in District Chagai, Balochistan, submitted by the Ministry of Industries and Production. It approved the declaration of Private Export Processing Zone (Saindak EPZ), under Section 9A, read with Section (k) of the Ordinance. The decision aims to facilitate development and export potential of the mineral sector in the region.

The ECC approved a TSG amounting to Rs2,022,857,991 (approx. US$7,276,468) for the Digital Economy Enhancement Project (DEEP) NADRA, as surrendered by the Ministry of Information Technology & Telecom for the year 2024-25 in favour of the interior ministry.

The ECC reiterated its previous decision regarding a quota ratio local/imported wheat for the remaining months of the current fiscal year at subsidised rates. The ECC approved a proposal from the Ministry of Law and Justice to transfer funds amounting to Rs21,250,000 to the Islamabad High Court, Islamabad, through a Technical Supplementary Grant for the repair and maintenance works of the buildings of the IHC.

The ECC approved the restructuring plan for PRAL (Pakistan Revenue Automation Limited). It also decided on a revised financial flow and budgeting mechanism, including the opening of selected cost centres and the diversion of current year funding in consultation with the secretary finance. The provision of Rs3.7 billion as the TSG for the current financial year 2024-25 was approved.

The ECC approved the Finance Division’s proposal for the arrangement of rupee cover amounting to Rs10 billion. This includes adjustments from the current side budgetary allocation for the current fiscal year, with US$105.5 million allocated for the Water Infrastructure Project (WIF), funded by ADB and US$137 million for the Flood Impact Infrastructure Project (FIIP), funded by the World Bank.

Chairing the Economic Coordination Committee (ECC) of the federal cabinet, the minister for finance and revenue provided the participants an overview of the economic landscape, underscoring the government’s efforts to implement policies aimed at bolstering economic stability and ensuring sustainable growth. He highlighted the progress made towards economic stability, the continued improvement in various economic sectors and government’s firm resolve to maintain and accelerate this momentum. Aurangzeb emphasised that the positive trends observed in economic indicators reflect the effectiveness of the government’s targeted measures and commitment to steering the country towards greater prosperity. A key highlight of the meeting was the presentation of the most recent Consumer Price Index (CPI) data, which recorded a significant drop to 4.9 percent in November 2024. This represents the lowest level of inflation since April 2018, when CPI stood at 3.96 percent. The decline in CPI reflects the government’s success in managing inflationary pressures and restoring price stability, particularly for essential commodities.

The ECC was also briefed on the substantial reduction in the prices of several essential goods and services. Among the items that have seen price drops are wheat flour, chilli powder, diesel, petrol, pulses, onions, basmati rice, electricity charges, sugar, plain bread, tea, soap, chicken, eggs, tomatoes, garlic, firewood, and salt. These reductions are seen as critical measures that have eased the financial burden on the common man and strengthened the purchasing power of the population.

Finance Minister Aurangzeb appreciated the efforts of stakeholders as prices of chicken have dropped by Rs49 per kg (from Rs383 to Rs334), gram pulse Rs31per kg (from Rs411 to Rs380) and Mash pulse to Rs20 per kg (from Rs528 to Rs508) during the last four weeks. The chair also directed the National Price Monitoring Committee and provincial governments to ensure a smooth supply of essential items as well as corrective measures regarding undue price hikes. The minister reiterated that the government remains fully committed to ensuring that the positive trajectory of economy continues. He emphasized that the government’s fiscal policies, including effective management of public finances, trade and energy sectors, have contributed significantly to an improvement in these indicators. He also reassured the public and business community that the government would remain focused on addressing inflation, stabilising the currency and improving domestic production. During the meeting, it was noted that while the country is experiencing a period of economic stability, continued efforts are required to maintain this progress. The government plans to enhance economic diversification, invest in key sectors like agriculture, manufacturing and infrastructure, and pursue reforms to strengthen the financial system.

The ECC also acknowledged the critical role of public-private partnerships in achieving long-term economic growth and job creation. It reaffirmed the government’s commitment to ongoing reforms and stabilisation measures aimed at ensuring economic growth and improving the living standards of the people. The ECC would continue to closely monitor developments and take proactive steps to safeguard economic stability and foster sustainable growth.

The finance minister expressed optimism that the progress made so far would serve as a foundation for future successes, as the government remains dedicated to building a prosperous and stable Pakistan.