Rs 1.2 trillion stimulus package approved by ECC

A special meeting of the Economic Coordination Committee (ECC) of the Cabinet on Monday gave approval to the fiscal stimulus package of Rs1.2 trillion announced by Prime Minister Imran Khan in the wake of coronavirus pandemic.
The meeting chaired by Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh stated that the purpose of the meeting was to fulfill the necessary requirements for different relief measures already announced by the prime minister for the public due to the ongoing coronavirus.
The ECC approved supplementary grant of Rs100 billion for the residual/emergency relief fund in terms of Article 84(a) of the Constitution for provision of funds for mitigating the affect of the COVID-19.
The special package for providing relief to the poor through cash assistance under the Ehsaas Programme was also approved by the ECC, which was designed to provide cash grants to 12 million families under the regular "Kafalat programme" and emergency cash assistance on the recommendation of the district administration.
The assistance would be provided for four months to besides BISP beneficiaries, it would be one time dispensation, the meeting was informed.
The meeting was further told that the cash would be provided either in one installment of Rs12,000 through Kafalat partner banks - Bank Alfalah and Habib Bank Limited - after biometric verification or in two installments of Rs6,000 each.
The Poverty Alleviation Division has been directed to present both options with feasibilities.
The partner banks may be asked to make arrangements through branchless banking networks to disburse cash.
Rs72.9 billion of additional funds through technical supplementary grant would be given to the BISP under Ehsaas Cash Assistance Package in response to the COVID-19 pandemic.
In response to a proposal of Ministry of Industries and Production regarding the targeting parameters, implementation mechanism, cash assistance per family per month and financial phasing of the programme, the ECC approved Rs200 billion of 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 outbreak.
The meeting was informed that as per estimate around three million workers would fall in this category, and they would have to be paid a minimum wage of Rs17,500 per month, and estimated cost of this provision for daily wagers comes around to Rs52.5 billion a month.
The ECC was informed that the provincial labour departments would ensure the delivery of assistance to the laborers, while the provision of funds shall be the responsibility of the federal government.
The ECC directed that immediate consultation with the provincial labor departments (mentioned under the provincial rules of business) might be carried out for providing timely assistance to those who were in need.
The ECC approved Rs50 billion for the Utility Stores Corporation (USC) to provide essential food items to the vulnerable section 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 to four people through Pakistan Post Foundation Logistics Division.
The USC has further planned to procure essential items within 2-3 weeks.
The ECC directed that the USC may 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 meeting also approved Rs75 billion for the Federal Board of Revenue (FBR) to enable them to payback the sales tax and income tax refunds, duty drawbacks and customs duties, which was due for the last 10 years. The amount would help approximately 676,055 beneficiaries by improving their liquidity position.
The ECC also allowed a cut in different taxes and duties on import and supply of different food items for alleviating the adverse impact of the COVID -19 on different sections of the society.
Rate of advance tax on the import of different pulses was reduced to zero percent from two percent, individuals and associations of persons providing tea, spices, dry milk and salt to USC without a brand name would pay 1.5 percent withholding tax instead of 4.5 percent and individuals and Association of Persons (AoP) receiving payments from USC for supplying ghee, sugar, pulses, and wheat flour would now be charged 1.5 percent withholding tax instead of 4.5 percent.
ACD (additional customs duty) at the rate of two percent on soya bean oil, canola oil, palm oil and sunflower oil (and on these four oil seeds) has also been exempted.
The ECC approved the supplementary grant of Rs30 billion to the 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 slowdown due to the worldwide outbreak of coronavirus epidemic.
The ECC was informed the State Bank of Pakistan (SBP) was working on payment of claims worth Rs49 billion, out of which around 40 billion would be paid by June, 2020.
The ECC also approved supplementary grant of Rs6 billion for Pakistan Railways to meet its expenses.
Pakistan Railways has suspended its passenger train services around the country since March 19, 2020.
The approved amount would be utilised 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 one sixth of its monthly income through coal freight, and the rest is suspended.