ECC approves Rs7.8bln subsidies on essential consumer goods

ISLAMABAD: The government on Wednesday approved Rs7.8 billion worth of subsidies on essential consumer goods under Ramazan relief package and extended permission to cotton imports from land routes for the current fiscal year.

The decisions were taken during a meeting of the Economic Coordination Committee (ECC) of the cabinet under the chairmanship Minister for Finance and Revenue Hafeez Shaikh.

The Utility Stores Corporation (USC) will subsidise 19 essential items, under the proposed relief package entailing subsidy equivalent to approximately Rs7.8 billion, including wheat flour, sugar and ghee, which have significant differential vis-à-vis prevailing prices in the domestic markets.

The committee was briefed that procurement would start from 1 April to ensure availability of basic items at discounted prices across 4,000 outlets of USCs throughout the country. The USC was directed to coordinate with the finance division for timely release of funds to ensure well-timed procurement and other contingent arrangements.

The ministry of commerce tabled a summary before the ECC seeking permission for import of cotton from Afghanistan and Central Asian States through land route via Torkham border to bridge the gap between supply and demand and to ensure sufficient availability of cotton for promoting textile exports.

The ECC had granted such permission earlier to work out necessary arrangements with reference to plant quarantine rules to meet sanitary and phytosanitary requirements for import of cotton via land routes. Ministry of commerce requested to extend the permission for import of cotton via land routes during the current financial year. The ECC approved the request subject to fulfillment of codal formalities.

Ministry of industries and production presented another summary seeking permission regarding operation of two plants, Agritech and Fatima Fertiliser, from March till November 2021 to produce urea from Sui Northern Gas Pipelines-based plants. The underlying rationale is to bridge the gap between estimated demand and actual domestic production of urea in the country.

The committee approved operations of the plants with a direction that the ministry might closely monitor the demand-supply situation and take decision to import urea, if needed, as per requirement during the current year.

The ECC approved revision in margins of dealers and oil marketing companies on the basis of 85 percent of the latest average core inflation with immediate effect.

The petroleum division updated the committee about the recommendations firmed up by a sub-committee established in line with the earlier decision of the ECC on 28 January regarding review of margins on petroleum products.

The committee further approved re-targeting of power sector subsidies. Power division was asked to complete the analysis based on the listed principles and submit specific recommendations on thresholds and rates for the consumers before the ECC by 31 March.

Ministry of national health services, regulation and coordination tabled a summary for exemption of taxes and duties on import of auto disable syringes and raw material needed for local manufacturing of auto disable syringes in the country. The forum was brief about efforts underway to switch from conventional syringes to auto disable syringes as reuse of conventional syringes leads to blood borne diseases in the country such as hepatitis and HIV. The ECC approved the summary, in principle, and directed the ministry of health to hold a follow-up meeting with the law division to fine-tune details.

The ECC also considered a summary regarding exemption of Rs10.3 million federal excise duty for 10 soft-skin vehicles imported by Food and Agriculture Organization to be used by the Department of Plant Protection for locust control operations. The detailed proposal was sought from a newly-constituted committee. Another committee was formed to mull reduction in biometric verification charges and licence renewal under further spectrum price.

The ECC further approved technical supplementary grants of Rs1.056 billion for the ministry of federal education and professional training for completion of projects related to COVID-19, Rs1.5 billion for the ministry of housing and works for disbursement of interest free loans to the borrowers under the low-cost housing scheme, Rs334.3 million for the ministry of interior for the payment of salaries / subsistence allowance to the civil armed forces deployed in the peacekeeping missions, Rs31.5 million for meeting expenses of federal insurance ombudsman secretariat working under the ministry of law and justice, Rs9.685 million for Pakistan National Shipping Corporation to clear the dues of Coniston against Pakistan Steel Mills, Rs67.3 million for the cabinet division for meeting various expenses and Rs419 million to facilitate Pakistan Central Cotton Committee to carry out its research and development activities.