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Govt to pay small businesses’ electricity bills for three months

SAMAA | - Posted: Apr 27, 2020 | Last Updated: 2 months ago
SAMAA |
Posted: Apr 27, 2020 | Last Updated: 2 months ago
Govt to pay small businesses’ electricity bills for three months

Minister for Industries & Production Hammad Azhar. Photo: FILE

The federal government is going to pay the electricity bills for small businesses across the country for the months of May, June and July.

Federal Minister of Industries and Production Hammad Azhar announced this and a package for labourers laid off during the coronavirus lockdown during a Monday afternoon press conference. He was speaking after the ECC meeting.

He said Rs75 billion has been allocated for the package. Under this scheme, Rs12,000 per family is being given to another four million to six million people who lost their jobs during the lockdown. The money will be given in collaboration with the Ehsaas Programme.

Azhar said his ministry is working with the Ehsaas team to launch a portal where people can apply for the programme. They are also planning to launch an SMS service. This is in addition to the 12 million people already being catered to under the Ehsaas emergency cash program under three categories.

The government wants to help smaller businesses affected by the lockdown and so it is introducing this scheme to ensure that it can facilitate them as much as possible, according to Azhar.

He estimated that 3.5 million small businesses will be given relief through this Rs50 billion package. Businesses with 5KW connections and industries with 70KW connections will not have to pay their bills for three months. The government is going to approximate their energy usage for the months of May, June and July, when they resume operations, and pay their bills in advance.

He said this will help 95% commercial connections and 80% industrial connections. Under the scheme, commercial consumers would be given support up to Rs100,000 and industrial consumers up to Rs450,000 for three months.

The base period for estimating electricity consumption would be May-July 2019 and for meters for which electricity consumption data is not available for the full base period, appropriate average will be used.

These are two schemes we have brought in, he said, adding that they will now work on a third scheme — a financial aid package for small businesses through which loans will be given without a guarantor.

On a proposal by the Finance Division, the ECC 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 Rs 2billion while the government would bear 40% 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 DFIs assigned limits under the SBP scheme would be eligible executing agencies.

These schemes will be put before the cabinet on Tuesday for approval.

Azhar clarified that the scheme will apply to commercial and industrial meters, both registered and unregistered. He called it a policy instrument to reach the maximum number of sectors.

Sector specific policies will be in the next phase, he explained. For media employees laid off, he said they will facilitate any package or suggestion that comes from the ministry of information and broadcasting.

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