COVID-19: ECC approves Rs1200b relief package

The Economic Coordination Committee on Monday approved the Rs1200 billion economic relief package announced by Prime Minister Imran Khan last week. The meeting of the committee was chaired by Adviser to the Prime Minister on Finance Dr Abdul Hafeez Sheikh. The package was given the final shape so it can be presented before the cabinet for approval when it meets tomorrow.

According to a notification, a Rs100bn emergency fund has been set up to provide relief to those suffering due to the pandemic. It was also agreed to provide 10.2 million people Rs12,000 on a monthly basis for four months via the Ehsaas Kifalat Programme. These funds will be disbursed through finger-printing by two private banks. Rs72 billion will be provided through the Benazir Income Support Programme.

Rs200 billion have been allocated for daily wage earners and labourers. The Federal Bureau of Revenue has been tasked to issue Rs75bn in tax refunds. As per the package, the 2% tax on import of pulses has been abolished and the withholding tax rate on spices, dry milk and salt supplies has been set at 1.5% for utility stores. Withholding tax on sugar, pulses and wheat suppliers has been kept at 1.5%. The council approved Rs30bn for textile exporters as payment of duty drawbacks.

A Rs6bn grant was approved for the Pakistan Railways. Earlier, PM Imran had on Tuesday unveiled a financial relief package worth around Rs1.2 trillion to ward off the negative impact of the coronavirus on the country and the economy.

The package included a reduction in the prices of petrol, diesel and kerosene by Rs15 per litre, the approval of a Rs3,000 monthly stipend for daily wage earners, and a rescue package for exporters and industrialists. "We have provided a relief package to the tune of Rs1.2 trillion, as it did not incorporate tax relief provided through abolishing/reducing taxes on pulses and palm oil," Federal Minister for Economic Affairs Hammad Azhar had told The News when asked about the exact financial impact of relief package announced by the premier. The PM also announced a relief package for industries and exporters to the tune of Rs200 billion, and said that the FBR was instructed to release Rs100 billion sales tax refunds on an immediate basis. It will help improving liquidity crunch being faced by the exporters, he added.

PM Imran said that the principle and mark-up of loans would also be deferred with the help of the Rs100 billion. He further noted that small and medium-sized enterprises (SME) would be provided concessional loans and their mark-up payments would also be deferred.

"The government has allocated Rs150 billion to provide a Rs3,000 monthly stipend to daily wage earners. The centre will also involve provinces to expand coverage of the programme for maximum beneficiaries," he said. "The government has increased additional allocation of Rs50 billion for Utility Stores Corporation (USC) so that provision of essential food items at affordable prices could be ensured," the premier announced, adding that Rs280 billion had been set aside for the procurement of wheat.

The PM also announced slashing prices of petroleum products by Rs15 per litre, including diesel, petrol and kerosene, with immediate effect.