KARACHI: The federal government has announced to provide a financing of Rs 539 billion to the exporters through State Bank of Pakistan (SBP) to facilitate the export sector.

According to the budget announcement for the next fiscal year (FY25), in order to support the export sector, the federal government has enhanced the allocation of the Export Refinance Scheme (ERS) through EXIM bank.

The Finance Minister, Muhammad Aurangzeb, in his budget speech announced to enhance the allocation from Rs 3.5 billion to Rs 13.8 billion for the export refinance scheme.

The federal government believed that with this move the portfolio of export refinance will increase Rs 100 billion to Rs 280 billion.

The government will also provide financing of Rs 539 billion to the export sector through the State Bank of Pakistan to support the exporters. The government has also decided to focus on the SME sector, and has asked banks to provide at least 20 percent financing to this sector.

Under the SMEs Strategy, the government has planned to increase credit to SMEs up to Rs 1.1 trillion from Rs 540 billion and initially Rs 100 billion will be increased during the next fiscal year (FY25). Government believes that these steps will give a lifeline to the export sector of the country.

The government has assured to make payments under the drawback of local taxes and levy (DLTL) phase wise. The government is also considering announcing a Risk Sharing Scheme for the export sector to help them in a difficult situation,

In addition, the government has also included a number of project in the Public Sector Development Program (PSDP) in order to support the exports, increase the production capacity of the export oriented industries, to enhance the competitiveness, promote digital infrastructure, innovation driven enterprises, for the promotion of Agro Industry, seed development, blue economy, research and development and other innovative reforms.

Copyright Business Recorder, 2024