The Economic Coordination Committee (ECC) of the Cabinet on Monday approved the fiscal stimulus package of Rs. 1.2 trillion aimed at addressing the ongoing challenges that emerged due to Covid-19 (Coronavirus) outbreak.
The ECC meeting was chaired by Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh here at the Cabinet Division, according to press statement issued by the finance ministry.
The purpose of the meeting was to fulfill the necessary requirements for different relief measures already announced by the prime minister for public due to the ongoing Coronavirus Pandemic, the statement added.
The ECC approved a supplementary grant of Rs. 00 billion for the Residual/Emergency Relief Fund in terms of article 84(a) of the constitution for provision of funds for mitigating the effect of COVID-19.
The special package for providing relief to the poor through cash assistance under the Ehsaas Program was also approved by the committee.
The package would 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 would be provided for four months and besides the BISP beneficiaries, it would be one time dispensation, it said, adding the cash would be provided either in one installment of Rs 12000 through Kafalat partner banks i.e Bank Alfalah and Habib Bank Limited after biometric verification or it may be provided in two installments of Rs. 6000/- each.
The Poverty Alleviation Division was asked to present both options with feasibilities.
The partner banks should be asked to make arrangements through branchless banking networks to disburse cash. Rs 72.9 billion of additional funds through technical supplementary grant would be given to BISP under “Ehsaas Cash Assistance Package in Response to COVID-19” Pandemic.
After Ministry of Industries and Production presented a comprehensive proposals regarding the targeting parameters , implementation mechanism, cash assistance per family per month and financial phasing of the program, ECC approved Rs. 200 billion of cash assistance for the daily wagers working in the formal industrial sector and who had been laid off as a result of COVID-19 outbreak.
It was estimated that around three million workers would fall in this category and they would have to be paid a minimum wage of Rs.17500 per month.
The estimated cost of this provision for daily wagers comes around to Rs. 52.5 billion a month. The provincial labour departments would ensure the delivery of assistance to the laborers while the provision of funds should be the responsibility of the federal government.
The committee directed that immediate consultation with the provincial labor departments( mentioned under the provincial rules of business) should be carried out for providing timely assistance to those who were in need.
The ECC approved Rs. 50 billion for Utility Stores Corporation to provide essential food items to the vulnerable section of the society at subsidized rates.
USC has prepared an initial plan to deliver 9 essential food items @ Rs 3000 for a family of 2+4 people through Pakistan Post Foundation Logistics Division.
The corporation had further planned to procure essential items within 2-3 week, the statement added.
It was directed that USC should engage with BISP to obtain data for targeted assistance and again come back to the ECC for a detailed proposal for reaching out to the poor families for the effective use of this package before making any expenditure from this amount.
The ECC also approved Rs.75 billion for Federal Board of Revenue (FBR) to enable it to payback the sales tax and income tax refunds, duty drawbacks and customs duties which is due for the last 10 years. The amount would help approximately 676055 beneficiaries by improving their liquidity position.
The ECC also allowed reduction of different taxes and duties on import and supply of different food items for alleviating the adverse impact 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 (AoPs) providing tea, spices, dry milk and salt to USC without a brand name would pay 1.5% withholding tax instead of 4.5%.
Individuals and AoP receiving payments from USC for supplying ghee, sugar, pulses, and wheat flour shall be charged 1.5% withholding tax instead of 4.5% earlier.
Additional customs duty(ACD) @ 2% on soya bean oil, canola oil, palm oil and sunflower oil (and on these four oil seeds) had also been exempted.
ECC approved the supplementary grant of Rs. 30 billion to Ministry of Commerce to payback 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 worldwide outbreak of Corona epidemic.
The committee was briefed SBP is working on payment of claims worth Rs. 49 billion out of which around 40 billion will be paid by June 2020.
The ECC approved a supplementary grant of Rs. 6 billion for Pakistan Railways to meet its expenses, the statement said, adding the Railways had suspended its passenger train services around the country since 19-3-2020.
The approved amount should be utilized for paying salaries to 70,000 employees, repairs, paying for utilities and performing disinfectant sprays on platforms and inside trains for proving safe journey to the passengers.
Currently Pakistan Railways is earning only 1/6th of its monthly income through coal freight and the rest is suspended, the statement concluded.