Hafeez out­lines govt's eco­nomic steps to cope with Covid-19

The Pak Banker - - FRONT PAGE - IS­LAM­ABAD -APP

Ad­viser to the Prime Min­is­ter on Fi­nance Dr Ab­dul Hafeez Sheikh on Wed­nes­day dis­cussed the mea­sures that the govern­ment is tak­ing in or­der to deal with the eco­nomic im­pact of the Covid-19 pan­demic.

Ad­dress­ing a press con­fer­ence, Sheikh said that the pan­demic is ex­pected to have a neg­a­tive ef­fect on the coun­try's econ­omy and out­lined the various rea­sons why this would oc­cur.

Ac­cord­ing to the pre­mier's spe­cial ad­viser demand for Pak­istan's ex­ports will fall as the economies of the coun­tries that it ex­ports to are weak­ened, re­mit­tances from ex­pa­tri­ates will be af­fected as coun­tries where they are based, such as Saudi Ara­bia and the United Arab Emi­rates, are weak­ened.

Eco­nomic ac­tiv­ity in Pak­istan will also be re­duced which will in turn re­duce peo­ple's in­come and taxes. Sheikh said that in Pak­istan, the prov­inces have a lot of im­por­tance but cur­rently both the prov­inces and the fed­eral govern­ment are work­ing to­gether.

"There is an ef­fort to cre­ated a united strat­egy in

Pak­istan," he said. The pre­mier shared the key points of the Rs1.25 tril­lion eco­nomic pack­age that had been an­nounced by Prime Min­is­ter Im­ran Khan a day ear­lier. Rs200 bil­lion des­ig­nated for any labourer who loses his job or sees a re­duc­tion in em­ploy­ment op­por­tu­ni­ties which will be dis­trib­uted af­ter con­sul­ta­tions with the busi­ness com­mu­nity and the prov­inces.

Rs100bn tax re­funds to ex­port in­dus­try to pro­vide them liq­uid­ity as soon as pos­si­ble so that their work isn't com­pletely halted. Rs100bn to in­crease the ac­tiv­ity and work of small busi­nesses and the agri­cul­ture sec­tor. Ad­di­tion­ally, will try to re­duce the price of fer­tiliser. Those who are af­fected or eco­nom­i­cally weak will be given Rs3,000 a month for 4 months; this will cover 12 mil­lion families.

Five ba­sic food items will be sold at lower prices at util­ity stores; Rs50bn will be given to util­ity stores for the pur­pose. 8.2mil­lion tonnes of wheat will be pur­chased by the govern­ment. Petrol, diesel etc prices will be re­duced by Rs15 per litre and this value will be main­tained. Lower elec­tric­ity and gas con­sumers will be given time for pay­ments.

Ad­di­tional Rs50bn for health work­ers' equip­ment, uni­forms and pro­tec­tion. Taxes on food prod­ucts will ei­ther be com­pletely re­moved or will be largely re­duced. Rs50bn for Na­tional Dis­as­ter Man­age­ment Au­thor­ity (NDMA) ; fur­ther will be given if they re­quire. Rs100bn fund for other de­mands of the busi­ness com­mu­nity. Fi­nan­cial mone­tary stim­u­lus will also be given. Two big de­ci­sions in this re­gard are the re­duc­tion in the pol­icy rate and if prin­ci­ple and in­ter­est are both due, then the busi­ness sec­tor will be given three to six months to re­turn it.

Mean­while, Pak­istan is an un­der de­vel­oped na­tion which has been suf­fer­ing from cri­sis af­ter cri­sis for the last many years and pass­ing through po­lit­i­cal po­lar­i­sa­tion as well and with bad gov­er­nance. While Pak­istan's econ­omy is al­ready on ven­ti­la­tor, the coro­n­avirus which is bring­ing the world econ­omy to a stand­still, can de­stroy our econ­omy like it de­stroys hu­man body's im­mune sys­tem and sim­i­larly this monster will hit ad­versely and make ir­re­versible dam­age and all at once. Pak­istan ac­cord­ing to rough es­ti­mates may in­cur ini­tial eco­nomic loss of Rs1.3tr due to coro­n­avirus.

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