ECC okays Rs125bn packages for workers, SMEs

ISLAMABAD: The Economic Coordination Committee (ECC) on Monday approved a Rs75 billion package for labourers rendered unemployed owing to lockdown and another Rs50.69 billion package to provide indirect cash flow support to

the small and medium size enterprises (SMEs) through pre-paid electricity.

Addressing a press conference after the ECC meeting, Minister for Industries and Production Hammad Azhar said the packages will be presented before the federal cabinet for approval on Tuesday (today). The minister said Rs75 billion package had been approved for the people rendered jobless due to the coronavirus crisis, adding the Ehsaas programme along with the Ministry of Industries and Production will launch a portal to register those rendered unemployed.

Under the package, the unemployed daily wagers will be provided with Rs12,000 in instalments and the details of the package will be uploaded on the website after its approval by the federal cabinet, he added.

The ECC chaired by Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh also approved Rs50.69 billion package for the SMEs titled “Chota Karobar-o-Sannat Imadadi Package”. It was prepared by the Ministry of Industries and Production, with active consultation of the Small and Medium Enterprises Development Authority (SMEDA).

Under the package, approximately 95 per cent commercial consumers with connected load up to 5 KW and 72 per cent of industrial consumers with connected load of up to 70 KW would be provided with financial support.

Commercial consumers would be given support up to Rs 100,000 and industrial consumers up to Rs 450,000 for three months, according to a press statement issued by the Ministry of Finance.

The base period for estimating electricity consumption would be May-July 2019 and for meters for which electricity consumption data was not available for the full base period, appropriate average will be used. To avail the facility under the package, pre-paid electricity bills of three months or total bills during the base period would be required. The period of consumption of the extended financial support would be six months starting from May/June 2020.

The ECC also allowed Rs2.5 billion block allocation to the Azad Jammu and Kashmir and Gilgit-Baltistan for disbursement through special arrangement.

It further instructed the Ministry of Industries and Production for bringing up similar relief packages for the agriculture sector, including for tube-wells as well as for transporters and the microfinance sector.

The ECC on a proposal by the Finance Division also approved a credit loss subsidy of Rs30 billion for the Risk Sharing Facility for State Bank of Pakistan’s Refinance Scheme to support employment and prevent lay-off of workers.

Under the scheme, financing would be extended to businesses with maximum sales turnover of Rs2 billion, while the government would bear 40 per cent first loss on distributed portfolio (principal portion only) for eligible borrowers, in case of repayments, after being classified as “loss” as per classification criteria under the respective SBP Prudential Regulations.

The banks and Development Financial Institutions (DFIs) assigned limits under the SBP scheme would be the eligible executing agencies. On a proposal by the Ministry of Economic Affairs, the ECC accorded in principle approval to the external debt restructuring of the Pakistan government by availing the G-20 debt relief and engaging with bilateral donors for individual debt suspension with the proviso that agreements to that effect could be subsequently brought to the ECC for approval. On another proposal by the Ministry of Defence, the ECC also approved allocation of additional funds in the form of technical supplementary grant to the tune of Rs3.02 billion for the fencing of Pak-Iran border.