The Economic Coordination Committee of the cabinet approved on Monday the fiscal stimulus package of Rs. 1.2 trillion announced by Prime Minister Imran Khan due to the coronavirus pandemic.
The approval was given at an ECC meeting presided over by PM’s Adviser on Finance Abdul Hafeez Shaikh. The purpose of the meeting was to fulfill necessary requirements for the relief measures.
The meeting approved a supplementary grant of Rs100 billion for provision of funds for mitigating the effects of COVID-19.
The special package to providing relief to the poor through cash assistance under the Ehsaas Program was also approved by the ECC. It will provide cash grants to 12 million families under the regular Kafalat Program and Emergency Cash Assistance on the recommendation of the district administration.
The assistance will be provided for four months and it will be one-time dispensation. The cash will be provided either in one installment of Rs 12,000 through Bank Alfalah and Habib Bank after biometric verification or it may be provided in two installments of Rs6,000 each.
The Poverty Alleviation Division was asked to present both options with feasibilities. The partner banks may be asked to make arrangements through branchless banking networks to disburse the amount. Rs72.9 billion additional funds would be given to the BISP under the Ehsaas Cash Assistance Package in Response to COVID-19 Pandemic.
The ECC approved Rs200 billion cash assistance for the daily wagers working in the formal industrial sector and who had been laid off as a result of the COVID-19 pandemic. It was estimated that around three million workers will fall in this category and they will have to be paid a minimum wage of Rs.17,500 per month. The estimated cost of this provision for daily wagers comes around to Rs52.5 billion a month.
The provincial labour departments shall ensure the delivery of assistance to the laborers while the provision of funds shall be the responsibility of the federal government. The meeting directed that immediate consultation with provincial labour departments be carried out for providing timely assistance to those in need.
ECC approved Rs50 billion for the Utility Stores Corporation to provide essential food items to the vulnerable segment of the society at subsidized rates. The USC has prepared an initial plan to deliver nine essential food items at Rs3,000 for a family of two-four people through Pakistan Post Foundation Logistics Division. It has further planned to procure essential items within two-three weeks.
The meeting directed that the USC engage with BISP to obtain data for targeted assistance and come back to the ECC for a detailed proposal for reaching out to the poor families for effective use of this package, before making any expenditure from this amount.
The ECC also approved Rs75 billion for the FBR to enable them to pay back the sales and income tax refunds, duty drawbacks and customs duties due for the last 10 years. The amount shall help approximately 676,055 beneficiaries by improving their liquidity position.
ECC also allowed reduction of different taxes and duties on import and supply of different food items for alleviating the adverse effects of COVID -19 on different sections of the society. Rate of advance tax on the import of different pulses was reduced to 0% from 2%. Individuals and associations of persons providing tea, spices, dry milk and salt to the USC without a brand name will pay 1.5% withholding tax instead of 4.5%. Individuals and AoP receiving payments from the USC for supplying ghee, sugar, pulses, and wheat flour shall be charged 1.5% withholding tax instead of 4.5% earlier. ACD (additional customs duty) of 2% on soya bean oil, canola oil, palm oil and sunflower oil (and on these four oil seeds) was exempted.
The meeting approved a supplementary grant of Rs30 billion to the Ministry of Commerce to pay back duty drawbacks to textile exporters in the current financial year to improve their liquidity position when their businesses are experiencing a slow down due to the worldwide outbreak of coronavirus pandemic. The ECC was briefed that the SBP was working on payment of claims worth Rs49 billion out of which around 40billion will be paid by June 2020.
The committee approved supplementary grant of Rs6 billion for Pakistan Railways to meet its expenses. The PR has suspended its passenger train services around the country since March 19. The approved amount shall be utilized for paying salaries to 70,000 employees, repairs, paying for utilities and for disinfecting platforms and trains for providing safe journey to the passengers.
Currently, the Pakistan Railways is earning only one-sixth of its monthly income through coal freight and the rest is suspended.