The Economic Coordination Committee (ECC) of the Cabinet is to approve a package for small business titled with" Chota Karobar Imdadi Package" on Monday (today).
This was stated by Minister for Industries and Production, Hammad Azhar on Sunday. Prime Minister's Advisor on Commerce, Abdul Razak Dawood was actively working on this package in collaboration with the Finance Advisor Dr Abdul Hafeez Shaikh.
The purpose of this package is to resolve issues of working capital of those small businesses which have been massively affected due to lockdown.
According to Hammad Azhar, millions of small businesses and industries shall benefit from this package once it is approved by the ECC and the cabinet which is scheduled to meet on Tuesday (tomorrow).
He further stated that the Ministry of Industries and Production is working on a collateral free financing for SME's for phase 2 of the relief package. The second phase would also include targeted/prioritized relief measures for sectors most hit by the Covid-19.
Former Chairman Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), Mashood Ali Khan argued that the private commercial banks were demanding hefty collateral against loans meant to pay wages.
"If a businessman is unable to provide the collateral, they are required to provide corporate guarantees but both of these things are impossible for small and micro businesses," he added.
Minister for Railways, Sheikh Rashid Ahmed in a television interview stated that small business, which are closed for the last one month, are facing severe financial crunch and need assistance from the government to survive.
Earlier this week, the ECC approved Rs75 billion for targeted payments to the low-income groups, especially labourers and daily wagers most severely affected by the lockdown in the country.
According to a statement released by the government last week, an estimated six million people are expected to benefit from the scheme in addition to the 12 million labour population already targeted through category Kifalat programme.
The amount was taken from the Prime Minister's COVID-19 Relief Package of Rs200 billion, disclosed the government.
The approval for the amount was given during an ECC meeting chaired by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh.
The Ministry of Industries and Production and the Poverty Alleviation and Social Sector Development Division (PASSD) were tasked to jointly work out comprehensive mechanisms and modalities to ensure a transparent and efficient disbursement of the support to the deserving people, the statement said.It is pertinent to mention that last month, the federal cabinet had approved a Rs1.2 trillion economic relief package.
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