Hike in prices of essential drugs approved by ECC

ISLAMABAD: A meeting of the Economic Coordination Committee (ECC) of the Cabinet approved an increase in the maximum retail price of essential drugs/ biological and fixed wheat procurement targets of five million metric tonnes for the provinces of Sindh, Punjab, and Balochistan for 2022-23 crops with required Cash Credit Limit (CCL).

The meeting of the ECC presided over by Finance Minister Ishaq Dar also approved the formation of a four-member committee to negotiate with the New York City government to rent out 1,025 rooms of the Roosevelt Hotel for a period of three years.

The ECC approved the Ministry of National Health Services summary for an increase in maximum retail prices of drugs based on the recommendations of the Policy Board of the Drug Regulatory Authority of Pakistan (DRAP) in the wake of the devaluation of the rupee and inflation.

Dollar-rupee fluctuation: Importers demand across-the-board hike in drug prices

The Finance Division stated that in order to ensure continuous availability of drugs in the market, the ECC as a one-time dispensation has allowed manufacturers and importers to increase their existing MRPs of essential drugs/biological equal to 70 per cent increase in CPI (with a cap of 14 per cent).

The ECC also allowed an increase in MRPs of all other drugs and lower priced drugs up to 70 per cent in CPI (with a cap of 20 per cent) on the basis of average CPI for the current year from 1st July 2022 to 1st April 2023 contingent to that it should be considered as an annual increase for the financial year 2023-24 and no increase under this category will be granted in next financial year.

The meeting further advised the Policy Board to review the situation after three months in July 2023 and make its recommendations to the federal government regarding price decrease in case the rupee appreciates.

The ECC approved the Ministry of National Food Security and Research summary for fixation of wheat procurement targets for Punjab, Sindh, and Balochistan that the public sector –PASSCO and provincial governments procure – local wheat in order to stabilise wheat prices and to ensure fair returns to the farmers during the post-harvest period with Punjab and Sindh as wheat producing zones with a share of 76 per cent and 15 per cent in national wheat production, respectively, whereas, the share of Khyber-Pakhtunkhwa and Balochistan is five per cent and four per cent, respectively.

The ECC was informed that the government of Sindh has devised a plan to procure 1.4 million metric tonnes of local wheat at Rs4,000 per 40kg with a tentative cash credit limit (CCL) of Rs214 billion – Rs140 billion for purchase of wheat and Rs74 billion for banks borrowing charges, whereas, the incidental charges to retain wheat crop for 2023-24 estimated at Rs917.6 per 40kg would be borne from their own budgetary provisions.

Similarly, Punjab province has approved the procurement of 3.5 million metric tonnes of wheat at Rs3,900 per 40kg with a tentative CCL of Rs950 billion –Rs343.35 billion for the purchase of local wheat and Rs606.65 billion on account of banks borrowing charges and cushion amount.

The provincial government of Balochistan has approved the wheat procurement target of 0.10 metric tonnes with the grant of interest-free loans for the purchase of the requisite quantity of local wheat procurement price of Rs3,900 per 40kg and did not request any CCL.

The ECC meeting was informed that the Ministry of Finance has supported the proposals with the observations that the CCL to the provinces would be issued by the Finance Division (FD) as per standard practice and procedure and provinces should ensure that no further increase in the commodity debt takes place and approved debt retirement plan will be shared with the Finance Division.

The Ministry of Aviation in a summary with regard to challenges and re-opening of Roosevelt Hotel, New York informed the ECC that the PIA Investment Limited (PIA-IL) management has got an offer from the New York City government to utilise 1,025 rooms of the Hotel over a period of three years for migrant business at US$ 200 per room per day.

The ECC after discussion approved the recommendations of the ministry and decided to form a four-member negotiating committee led by the Secretary Aviation to negotiate with the New York City government and the Hotel Union. The ECC also allowed PIA-IL/RHC to utilise the funds of $ 1.145 million from the available balance as bridge financing to commence the re-opening work at the Hotel.

The ECC considered and approved Rs35 million additional funds as Technical Supplementary Grant in favour of the Ministry of Interior for the establishment of Passport Processing Centres (PPCs) at the tehsil level in 30 administrative units throughout the country and creation of 30 posts of MRP operational officers in the Department of Immigration and Passports, subject to the approval of the Austerity Committee;Rs450 million in favour of the Ministry of Interior as Technical Supplementary Grant to meet the operational requirements of the ICT Police regarding its liabilities and training of recruit.

Copyright Business Recorder, 2023