Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet here at the Cabinet Division.

ECC discussed in detail the need to import wheat in the country through the government and private sector. The Chair directed that the availability of wheat is an important issue and there is a need to maintain sufficient stock of wheat in the country which could be made available at a reasonable price. It was decided that TCP will start importing wheat in the required quantities through small tenders from time to time to maintain the wheat supply at a reasonable price and for keeping additional strategic reserves.

Mr. Yao Jing, Ambassador of People’s Republic of China made a farewell call on the Adviser to Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh here at the Finance Division.

The Adviser appreciated the commitment with which Mr. Jing worked for the progress of the Pak- China relationship. The Adviser acknowledged the contributions of Ambassador Jing and China’s leadership for Pakistan and expressed hope that his predecessor will work on the same lines.

Ambassador Jing thanked the Adviser for his support and expressed desire to further strengthen the two country’s relationship.. He said that CPEC is a project that is an inspiration for the rest of the world. The Ambassador also appreciated the strategy adopted by the government of Pakistan during the covid-19 crisis and said that the rest of the world could follow and learn from Pakistan’s experience.

The Ambassador expressed his confidence that FATF’s October review will go well for Pakistan. At the end the Adviser presented a shield to the outgoing Ambassador as a token of Finance Division’s acknowledgement for his valuable services and said that his successor will be welcomed with the same spirit.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet here at the Cabinet Division.

ECC allowed the amendment in the import of Customs Duty Free Cars under disabled persons ‘scheme. Under the new amendments the income bracket of the person who is importing the vehicle is increased from the current limit of Rs. 20,000 to 100,000 to 100,000 to 200,000 per month. He will be allowed to import the vehicle if he has not imported or purchased locally assembled car during the last 10 years under the scheme provided that he holds NTN Certificate and files annual tax return.

ECC approved the Incorporation of Pakistan Single Window Company under section 42 of the Companies Act, 2017 with its objectives as contained in the Memorandum & Articles of Association. The composition of the Board of its Directors was also approved.

ECC also gave approval for the provision of technical supplementary grant of Rs. 219.631 million for the reimbursement of the expenditure of National Coordination Committee on Covid-19 for the current financial year. Rs. 6 billion were approved for the Ministry of Railways as additional grant @ 500 million per month to defray its mandatory liabilities including pay and pensions.

Two technical supplementary grants amounting to Rs. 160 million and Rs 96 million were approved for the Ministry of Federal Education and Professional Training to carry out the “Skill for all” program and for “Mainstreaming of Religious Education and matters related to deeni Madaris” respectively.

The Publication of Rolling Spectrum Strategy 2020-2023 was also approved by ECC.

A detailed discussion on the issue of wheat import was also held but could not be finalized due to the paucity of time. Chairman ECC decided that the issue being critical in nature would be further deliberated in a special meeting of the ECC to be held within the current week.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired two separate meetings here at the Finance Division with the group of representatives from fertilizer industry and APTMA to discuss the issue of Gas Infrastructure Development Cess, GIDC. SAPM on Petroleum Mr. Nadeem Baber and Minister for Industries Mr. Hammad Azhar were also present during the meetings. Officials of the Ministry of Finance, Petroleum Division and FBR also assisted during the meeting.

Lt. Gen. (Retd) Tariq Khan, Chairman, FMPAC and Chairman APTMA, Dr. Amanullah Kassim Machiyara in two separate meetings requested the Adviser Finance to extend the time limit for the payment of GIDC so that both industries have a better liquidity position.

The Adviser discussed the issue in detail with the participants of the meeting and provided due opportunity to share their views supported by the relevant facts. The Advisor on Finance however underlined that decision of the honorable Supreme Court of Pakistan has to be implemented. SAPM on Petroleum and Minister for Industries also briefed the meeting.

After detailed deliberations the Chair decided that the issue will be resolved in the light of the decision of the court but the government will also support the industry in the post Corona environment. The Adviser directed that two separate sub-groups will be formed to look into the issue of GIDC to propose 2-3 workable options for the amicable solution. The first group shall have representatives from the fertilizer industry, Finance Ministry, FBR and Adviser Petroleum to be headed by the Minister for Industries. The second group shall have representatives from APTMA, Finance Ministry, FBR, Adviser Petroleum, Adviser to PM on Commerce and Minister for Industries. The Minister for Industries shall chair both groups and shall present recommendations in the meeting to be held next week.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the second meeting of the FBR Policy Board here at the FBR Headquarters.

Chairman FBR briefed the Adviser on the efforts the institute has been making to improve the abilities and expertise of its human resource and on the progress of the automation drive of FBR/Customs.

Chairman FBR briefed the Adviser on measures taken and future course planned to improve skills and competence of its staff by providing different in-house and foreign trainings to improve managerial competence and adopt a culture of performance based incentives including promotions. He also briefed the Adviser on the work being done on the IRIS (software) side to consolidate various application platforms into one to improve efficiency and performance. The Chairman further informed that a technologically advanced sales tax registration verification mechanism is introduced whereby officers with tablets will be sent to capture real time information and pictures including GPS coordinates of businesses requiring verification. Details of data sharing arrangements agreed to by 12 other organizations with FBR were also discussed in the meeting.

Advisor to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the 5th meeting of the Steering Committee on Pakistan Single Window (PSW) here at the FBR Headquarters.

The Adviser was updated that the steering committee on PSW has met four times and the decisions taken during the 4th meeting are mostly implemented. The PSW Bill 2020 has been introduced in the Parliament. The modified PC-I has been approved by the CDWP. The PSW Company has been incorporated and the hiring process for filling up the top positions has been initiated. It was also briefed to the Adviser that a development team is working on to roll out the first phase of the PSW system in the current financial year and in this regard negotiations are underway with NADRA, SECP and 1 link for information exchange.

The Chair gave approval for giving directives to Ministries to finalize BRS/Policy intervention by 15th September and appoint focal persons and, for modification of previous decision of the steering committee to allow hiring in PSW Company as per relevant law, rules and guidelines of SECP.

Adviser to Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired a meeting here at Finance Division with the delegation of FORTESCUE Metal Group Ltd Australia led by Mr. Andrew Forrest, Chairman of the Group.

The Chairman thanked the Adviser for his time and providing an opportunity to discuss business prospects between Pakistan and the Australian based Company. The Chairman briefed the Advisor that his Company, Fortescue, founded in 2003, has discovered and developed major iron ore deposits and constructed the most significant mines in the world. They have grown to be one of the largest global iron producers and are focused on the vision of being the safest, lowest cost and most profitable mining company. He also shared that the Company has significant presence in the markets of China, Japan, South Korea, India, Ecuador, Colombia, Chile, Peru, Portugal and Kazakhstan. Currently the company is consistently shipping around 170 million tons of iron ore per annum; he further added that Fortescue is seeking to expand globally through identification, evaluation, development and delivery of energy projects including large hydropower facilities and green industry.

The Advisor welcomed the delegation and said that Pakistan’s unique location makes it the best potential destination for foreign investment. He said that Pakistan has one of the biggest coal reserves located in Thar and there are rich copper and gold resources available in the country. He shared that the country has the best locations for solar power generation and up to 80,000 MWs of hydel electricity production potential is available in the country. With the country’s significant progression on the Ease of Doing Business Index and the promulgation of Law of Special Economic Zones (SEZ), Pakistan offers investment opportunities in energy, infrastructure, information & communication technology, textiles, apparel, surgical instruments, leather and footwear. All these sectors offer favorable economic opportunities to the world for investment and trade.

The Advisor offered all possible cooperation from the Federal Government as well as all the relevant provincial and local government organizations to help them start and expand their business in Pakistan and add to the development and prosperity of the country.

National Price Monitoring Committee (NPMC) meeting was held under the Chairmanship of Special Finance Secretary here at Finance Division to discuss the price trend of essential food items. The meeting was attended by representatives from the provincial governments, Islamabad Capital Territory, Ministries of Industries, Commerce, Law and Justice, Planning, Development & Special Initiatives, National Food Security & Research, Inter Provincial Coordination (IPC) along with Competition Commission of Pakistan and Pakistan Bureau of Statistics.

The meeting was informed that CPI inflation year on year is recorded at 8.2 % in August 2020 as against 10.5 percent during the same month last year. The meeting also noted that average inflation during Jul-August FY 2021 also showing declining trend and recorded at 8.7 percent as compared to 9.4 percent same period last year. Government in consultation with all stakeholders is proactively taking measures to control the general price level of daily use items at country level.

Provincial governments and ICT informed that they are regularly monitoring the prices and taking strict action against hoarding and undue profiteering. Government in consultation with all stakeholders is proactively taking measures to control the general price level of daily use items at Federal, provincial and district levels.

The Committee also discussed the price movements of essential items among the provinces/ICT and observed variations in price level. It was decided that all provincial governments and ICT administration will take proactive measures to control the undue price hike of essential items. It was decided that provincial governments should provide information regarding the flood damages of minor and major crops to MNFS&R for timely response to any shortages. Ministries of Industries & Production and Commerce were directed to take prompt actions and provide necessary support to facilitate the import of essential food items.

Ministry of National Food Security & Research was directed to keep an eye on the supply & demand of pulses and vegetables including tomatoes, potatoes and onion and take necessary measure such as timely import for the smooth availability of these items.

It was also noted that profit margin between wholesale and retail is huge in items like Apples, Bananas, Gram Pulse, Mash Pulse, Masoor Pulse, Garlic, Tomatoes, Onions. The Chair urged that provincial governments and ICT to take corrective measures to check undue profit margin. The Chair appreciated the PBS regarding sharing the provincial profit margin to provinces, ICT and also directed to share the detail of provincial markets to them in order to take strict action against profiteers. The IPC was also directed to coordinate in this matter so that consumers of each province may get relief to pay minimum margin.

While concluding the meeting the Chair emphasized the provision of essential commodities at affordable prices. Provinces were asked to take strict action against hoarding, adulteration, smuggling, undue profiteering and to ensure uninterrupted supply of daily use items to masses at lower prices. Federal Government will provide all possible cooperation in this regard for stability of prices in the country. The Utility Store Corporation was also instructed to ensure strict control on the quality of daily use items in their all outlets.

Mr. Irfan Wahab Khan CEO of Telenor Pakistan called on the Adviser to Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh here at the Finance Division.

The CEO briefed the Adviser about the brief history and services of the company and expressed the intention to increase the company’s investment in the country with help and assistance from the Government. He briefed that this week they have received additional capital of Rs7.4 B (45 M USD) into Telenor Microfinance Bank from Ant Financial and Telenor. This brings the total FDI to $185 million in the last 2 years alone as equity injection into Telenor Bank/Easypaisa to grow Pakistan’s digital payment ecosystem. The CEO also shared that telecom sector has an investment potential of about US$ 1 billion which can be tapped. He gave a briefing on his plans to improve and provide latest telecommunication services in AJK and GB. He said during the Corona Virus pandemic the use of IT services has helped the economy in a positive way but as the resources of the people are shrinking they are also optimizing, he requested the Adviser to grant certain concessions for the further growth of the sector.

The CEO requested that in view of the ongoing economic situation of businesses in the country FBR may be asked to rationalize the withholding tax/ GST on telecommunication services. He also requested that the issue of SIM Issuance Tax may be settled out of court to bring on an amicable end to this matter. Other issues regarding the renewal of licenses were also discussed.

The Adviser appreciated the contribution of the telecom sector in the development of the country and said it is an important sector which is helping the people in many ways; from job creation to communication and in providing digital access to financial services. He assured all possible help and support for the telecom sector for the prosperity of the country and the industry.

Adviser to Prime Minister on Finance and Revenue chaired a meeting here at the Finance Division with Special Assistant to Prime Minister on Social Protection and Poverty Alleviation (SP&PA) Dr. Sania Nishtar for an update on the preparations of release of second tranche of Ehsaas Cash Assistance package in response to Covid-19.

SAPM briefed the Adviser that during the first phase of the program as response to the Covid-19 pandemic, an amount of Rs.175 billion was disbursed by BISP to 14.6 million beneficiaries @ 12000 as one time assistance during 2019-20. Now under the instructions of the Prime Minister the second phase has to be started to provide additional cash relief to those who need it most urgently. The Special Assistant on SPPA briefed that there are 4.6 million regular beneficiaries of Kafalat program, and one time Emergency Cash Assistance was provided to 11.6 million beneficiaries during the pandemic to look after their cash needs.

The Special Assistant said that for the second tranche a revised list of Emergency Cash Assistance beneficiaries will soon be prepared (as the number might be reduced due to control in the spread of the disease and opening on businesses and markets) and all the necessary details will soon be shared with the Finance Division.

The Adviser appreciated the efforts of the Poverty Alleviation Division in looking after the poorest of the poor in the unexpected times and said that for the second tranche of the cash assistance program, Finance Division shall provide all possible help after the SP&PA Division works out the exact requirement of funds for the Kafalat Program, Emergency Cash Assistance and for paying bank Service charges. He also directed to provide an update to the Finance Division about the transparency standards and expenditure already made under round-1 of Ehsaas Emergency Cash Assistance Program.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet here at the Cabinet Division.

In order to meet the financial challenges faced by Roosevelt Hotel, New York, ECC approved the amount up to $142 million for PIA-IL on the recommendation of the Committee constituted in an earlier meeting of the ECC, headed by Deputy Chairman Planning Commission and including Secretaries of Finance Division, Aviation Division and Law and Justice Division.

ECC also approved the summary moved by the Power Division for the rationalization of eleven quarterly adjustments of K-Electric Limited from July 2016 to March 2019. The quarterly adjustments of K-Electric for period from July 2016 to March 2019 will be notified with effect from 1st September 2020 to bring the tariff K-Electric at par with what is currently in filed for consumers of (X-WAPDA)DISCOS.

Adviser to Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of Cabinet Committee on State Owned Enterprises (SOEs) here at the Cabinet Division.

The Adviser was given a detailed briefing on the triage of State Owned Entities. The triage was undertaken for i) Liquidation, ii) Privatization and iii) Retention under government ownership, on the basis of economic rationale and financial performance of SOEs. The CCoSOEs discussed in detail the proposed SOEs for retention, privatization and for restructuring. The Advisor directed that the list should be reviewed and revisited till the next meeting and a new category may be introduced in the list where ownership may be retained by the government and the entity can be operated by the private sector for better management.

A draft Law on the State Owned Enterprises was also discussed in the meeting. The Adviser directed that the law may be reviewed further in consultation with the line Ministries/Divisions and the Law Division.

There was also a proposal on the Forensic Audit of the Major Loss Making SOEs on the instructions of the Prime Minister. The Chair directed that before taking a final decision on the proposed forensic audit, detailed information on the following aspects may be shared with CCoSOEs in its next meeting; (i) the availability of sufficient forensic audit expertise within AGP, (ii) the estimated cost in case the audit is to be outsourced to leading audit firms, (iii) the proposed time duration of forensic audit, and (iv) a proposed list of loss-making entities for forensic audit. He further advised that line Ministries/Divisions may also be consulted to select the companies and that the companies may not be concentrated in a particular sector. He instructed that these proposals need to be finalized by the next meeting of the CCoSOEs.

Adviser to the Prime Minister on Finance and Revenue chaired the meeting of the Economic Coordination Committee of the Cabinet (ECC) here at the Cabinet Division.

ECC was given an update on the issue of the Roosevelt Hotel, as directed by the Adviser Finance in an earlier meeting. The Adviser directed that the issue should be handled in fair and most transparent manner and in the best national interest. He directed that all stakeholders including Secretary Aviation should be included in every discussion/ negotiation related to the issues of the Roosevelt Hotel. Chairman ECC further directed that it should be made clear to all that in this transaction all matters shall be resolved in a manner that is only in favor of the country and not benefitting any individual or party.

ECC approved the technical supplementary grant equivalent to Rs.252.382 million for the discharge of liabilities related to M/s Karkey arbitration.

Procurement of 83 X Micron sprayers for anti-locust operation was allowed by ECC to National Disaster Management Authority with the grant of special exemption of taxes and duties of import.
On a proposal pertaining to the taxation issues related to the telecom sector ECC decided that proposal may be submitted in the next ECC after thorough deliberation of its impact on already in vogue taxation policies, by FBR, Ministry of Commerce and Ministry of Industries.

The Economic Coordination Committee (ECC) of the Cabinet has allowed the Trading Corporation of Pakistan (TCP) to place an order for the import of 200,000 tonnes of wheat in the public sector following the import of 500,000 tonnes of wheat by the private sector in the country.

The ECC chaired by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh gave the TCP a go-ahead for the import of 200,000 tonnes of wheat for PASSCO after the Ministry of National Food Security and Research Secretary Omar Hamid Khan told the ECC that 500,000 tonnes of wheat was also being imported by the private sector and the first shipment was already scheduled to reach the country’s port on 26th August 2020. It was observed that the arrival of 700,000 tonnes of wheat in the next couple of months would help defuse price volatility, overcome shortage and discourage hoarding of this essential commodity in the country.

The ECC further tasked the Secretary National Food Security and Research along with Minister for Economic Affairs Makhdoom Khusro Bakhtiar to consult with the Provincial governments whether they would like to purchase any amount of wheat at the rates offered to TCP by global suppliers since the global wheat prices generally remain on the lower side in the months of July and August.

The government has already allowed the TCP to import 1.5 million tonnes of wheat through a transparent open international bidding process, to meet the identified demand of 0.70 million tonnes of wheat by Punjab, 0.30 million tonnes of wheat by Khyber Pakhtunkhwa and 0.5 million tonnes required to replenish the strategic reserves of PASSCO. The wheat would be imported in a staggered manner to fetch the best price as well as to save carrying cost and meet the shortage as and when required.

It was noted that wheat stocks to the tune of 26.05 million tones, including 25.457 million tonnes from fresh wheat produce and 0.602 million from the carry forward stocks, were currently available in the country, reflecting a shortfall of 1.411 million tonnes. The availability of wheat stocks in the public sector was reported at 6.32 million tonnes compared to 7.55 million tonnes during the corresponding period last year.

The ECC also took up a proposal for the import of sugar through the private importers in view of fast depleting stocks of sugar which currently stood at 1.2 million tonnes but were likely to exhaust by early November 2020, and decided to reduce the levy of sales tax and other duties on the import of sugar by the private importers to keep the landed cost at the lowest possible level to allow a fair and affordable price to the consumers.

The ECC also took up the issue of waiver of demurrage charges on Afghan Transit Trade cargo stranded at Karachi ports in view of the matter being a Force Majeure and the past three instances similar waivers, and asked the Ministry of Maritime Affairs to take up the issue with the port authorities and terminal operators for its amicable resolution.

On a proposal by the Ministry of Energy (Petroleum Division), the ECC took up the issue of Jamshoro Joint Venture Limited (JJVL) expired agreement with Sui Southern Gas Company Limited (SSGC) and gave principled approval for resumption of LPG/NGL and production from the JJVL plant under proposed conditions subject to their endorsement from the Office of Attorney General. Rational behind the decision was to reduce the import of LPG when domestic production was possible.

The ECC also discussed and approved a proposal by the Finance Division for fixation of dividend on SBP shares and allowed the bank to provide dividend at the rate of 10% on the face value of SBP shares in the Bank’s annual accounts for the year ended 30th June 2020.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of the Cabinet Committee on Privatization here on Friday.

CCOP approved the “Divestment of up to 7% Government owned shares in OGDCL” through public offerings and directed to initiate the process of appointment of Financial Adviser for the process.

CCOP also gave approval for the privatization of Guddu Power Plant (747 MW) and gave directions to all the divisions/entities for resolving issues of Guddu Power Plant to facilitate the privatization Process.

Divestment of upto 10% of GOP’s shares in PPL through Public offerings was also approved by CCOP.

On the recommendation of the Aviation Division CCoP directed that on Hotel Roosevelt Manhattan, updating of M/s Deloitte reports may be held in abeyance till the revival of the economic and business environment in Manhattan, New York. The report updation will also cost fee of 30k-35k while the overall business environment in prevailing in Manhattan is not favorable (as of lesser use now), it was briefed to the CCoP.

Transaction Structures for the (a) Privatization of Services International Hotel, Lahore, b) Jinnah Convention Center c) Divestment of up to 20% shares of Pakistan Reinsurance Company Limited held by GoP d) House Building Finance Company Limited and e) First Women Bank limited were also approved by CCoP.

The National Price Monitoring Committee (NPMC) has asked the Ministry of National Food Security & Research to consult the provincial governments and remain vigilant to control the wheat/flour and sugar prices, and take immediate necessary measures to ensure provision of these items at affordable prices.

The NPMC meeting chaired by the Secretary Finance today also called for the provincial governments to provide support to market committees in collaboration with district administration to play proactive role by removing the price disparity among the provinces and also ensure the smooth supply of essential items.

The meeting also discussed the price trend of essential food items. Representatives from the provincial governments, Islamabad Capital Territory, Ministries of Industries, Commerce, Law and Justice, Planning, Development & Special Initiatives, National Food Security & Research, Inter Provincial Coordination (IPC), Competition Commission of Pakistan, Cabinet Division and Pakistan Bureau of Statistics were present.

The meeting was informed that CPI inflation year on year was recorded at 9.3 % in July 2020. It was noticed that Sensitive Price Indicator (SPI) which monitors the price movement of 51 essential items on weekly basis recorded a decline of 0.22% for the week ended on 13th August, 2020. This was second consecutive decline in SPI during the month of August 2020 which augurs well to tame down inflationary pressure in the country. During the week, 11 items recorded decline in their prices while 22 items remain stable.

Provincial governments and ICT informed the meeting that they were regularly monitoring the prices and taking strict action against hoarding and undue profiteering. Government in consultation with all stakeholders is proactively taking measures to control the general price level of daily use items at Federal, provincial and district levels. The Committee also discussed the price movements of essential items among the provinces/ICT and observed variations in price level. It was decided that all provincial governments and ICT administration will take proactive measures to control the undue price hike of essential items in the market.

Ministry of National Food Security & Research was directed to consult the provincial governments and remain vigilant to control the wheat/flour and sugar prices, and take immediate necessary measures to ensure provision of these items at affordable prices. It was further suggested that provincial governments should provide support to market committees in collaboration with district administration to play proactive role by removing the price disparity among the provinces and also ensure the smooth supply of essential items.

Utility Store Corporation (USC) informed that the Corporation was procuring stock of commodities (Pulses/Rice) through open competitive bidding. The Tender Committee at the time of opening of bids/tenders examines the samples thoroughly so as to ensure the selection of good quality product as per prescribed specifications. Hence the commodities procured is strictly monitored and checked randomly to ensure provision of quality items. Further the surprise inspections are also carried out to examine the stocks at Warehouses. The Chair directed to further strengthen the quality control mechanism of essential items at Utility Stores.

It was also noted that profit margin between wholesale and retail is huge in items like Apples, Bananas, Gram Pulse, Mash Pulse, Masoor Pulse, Tomatoes and Onions. The Chair urged that provincial governments should take corrective measures to check undue profit margin. PBS was also directed to share the province wise margin between wholesalers and retailers so that provinces may take prompt action against anti market practices.

Competition Commission of Pakistan (CCP) gave detail presentation on structure of Sugar and Poultry industry and their existing price mechanism. The Chair directed CCP to provide an action plan with concrete recommendations to check the anti market practices in these sectors.

While concluding the meeting the Chair emphasized that provision of essential commodities at affordable prices is the foremost agenda of the present government. There is dire need that provinces should take strict action against hoarding, adulteration, smuggling and over-due profiteering to ensure uninterrupted supply of daily use items to masses at lower prices and Federal Government will provide all possible cooperation in this regard for stability of prices in the country.

Advisor to the Prime Minister on Finance & Revenue Dr Abdul Hafeez Shaikh held an introductory meeting with the newly appointed Country Director of the World Bank in Pakistan, Mr. Najy Benhassine today.

The World Bank portfolio in Pakistan includes 56 active projects amounting to approximately $11 billion. The portfolio supports reforms and investments to strengthen institutions, particularly in fiscal management and human development.

Dr Shaikh welcomed the Country Director and appreciated the strong working relationship between the Government of Pakistan and the World Bank. He highlighted the reforms initiated by the Government to tackle the balance of payment crisis in 2018/19 and bring stability to the economy. Dr Shaikh shared details of how the COVID pandemic has adversely impacted the economy and slowed down the reforms program.

Dr Shaikh outlined the steps taken by the Government to tackle the COVID 19 pandemic and stimulate the economy. In particular, he highlighted the Prime Minister’s Ehsas program where over 16 million of the most vulnerable households have benefitted from cash transfers. Similarly, support provided to SMEs and business in the form of subsidized payroll loans, deferred loan repayments and subsidy on power bills have supported economic activities during the pandemic induced downturn.

Mr. NajyBenhassine appreciated the strong response by the Government during the COVID 19 pandemic and highlighted the World Banks support to the emergency response with projects totalling almost half a billion dollars to help the country prevent, detect and respond to the pandemic and strengthen public health preparedness.

Dr Hafeez Shaikh appreciated the support provided by the World Bank during the pandemic and stressed on the need to continue with the reform’s agenda. In particular, he stressed on the need to strengthen public finances with a focus towards enhancing the tax base and improved expenditure management. He requested technical inputs from the World Bank on the pension reforms currently being prepared by the Ministry of Finance.

Looking ahead both sides reaffirmed to strengthen the relationship and remove bottlenecks in executing the development projects funded by the World Bank.

Foreign remittances during the month of July FY2021 rose to $ 2768.1 million as compared to $ 2027.9 million of remittances received in the corresponding month last year, registering a growth of 36.5 %, the highest ever in a single month in Pakistan.

On month-o-month basis, remittances increased by 12.2% in July 2020, recorded $2768.1 million ($ 2466.3million in June 2020). Share of remittances from Saudi Arabia 29.7 % ($ 821.6 million), U.A.E 19.4% ($ 538.2 million), USA 9.1 % ($ 250.6 million), U.K 14.2 % ($ 393.9 million), other GCC countries 10.7 % ($ 297 million), Malaysia 0.8 % ($ 22.3 million), EU 8.2 % ($ 227.6 million) and other countries 7.8 %.

The Reimbursement of T.T. Charges Scheme is revised in March 2020 accordingly, the amount of Home Remittance transaction between USD 100/- and USD 200/- (or equivalent in other currencies) to be reimbursed increased from Saudi Riyal (SAR) 10/- to SAR 20/-

SBP has raised the payment limits for information technology (IT) related freelance services from US$ 5,000 to US$ 25,000 per individual per month to enhance business-to-customer transactions through home remittance channel. The enhancement in limit is facilitating freelancers to increase home remittances through formal banking channels in the country.

To encourage promotion of home remittances through formal channels, the performance based scheme is effective from January 01, 2020 in which, Rs. 1 per each incremental USD mobilized over 15% growth in remittances in calendar year 2020 compared with the levels achieved in calendar year 2019.

A “National Remittance Loyalty Program” will be launched from September 1, 2020 with collaboration of major commercial banks and government agencies through which various incentives will be given to remitters through mobile apps and cards.

ECC approved a technical supplementary grant of Rs.9.6 billion during the current financial year to finance the above-mentioned initiatives.

In recent budget FY2021, an amount of Rs 25 billion has been allocated to improve foreign remittances through banking channels and build up foreign exchange reserves

Exemption of withholding tax on cash withdrawal or on issuance of banking instruments / transfers from a domestic bank account to the extent of remittance amount received from abroad in such account in a year.

Financial institutions were motivated to use effective marketing campaigns with particular focus on digital channels for sending and receiving remittances to promote the use of legal channels.

The significant increase in remittances during July 2020 can be attributed to a number of factors including orderly exchange rate conditions and policy steps taken by the State Bank and the Federal Government under the Pakistan Remittance Initiative.

The growth rate in remittances compared to the same month in the previous year is around twice as high as the Eid-ul-Adha related seasonality typically experienced over the last decade.

Due to COVID-19 economic slowdown, remittances are targeted at $21.5 billion for FY2021 but with improving situation, we are very much hopeful that we will surpass the target.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh has said that the government will take all out measures to ensure availability of sufficient wheat and flour to the masses throughout the year.

He made this statement while chairing a meeting held at the Finance Division to review the situation, availability and future demand of wheat and flour in the Khyber Pakhtunkhwa province. Adviser to the Prime Minister on Commerce, Textile and Investment Abdul Razak Dawood, Finance Minister Khyber Pakhtunkhwa Taimur Saleem Jhagra, Chief Secretary Khyber Pakhtunkhwa Dr. Kazim Niaz, Secretary Finance Naveed Kamran Baloch, Secretary National Food Security & Research Omar Hamid Khan were also present.

The meeting reviewed the current wheat situation in the province in detail, particularly existing stocks in the public sector and requirement for the province until the next harvest in Khyber Pakhtunkhwa, and decided to take appropriate measures to ensure sufficient supply and availability of wheat and flour in the Khyber Pakhtunkhwa in the coming months.

Chief Secretary Khyber Pakhtunkhwa Dr. Kazim Niaz told the meeting that Khyber Pakhtunkhwa government had about 0.6 million tones of wheat in its stocks while it had recently procured 100,000 tonnes of wheat from PASSCO and another 100,000 from it was in the process of being carried off to the province. He said the provincial authorities planned to procure another 300,000 tonnes of wheat from the PASSCO for which they were already in touch with the body. Similarly, they had plans to import 300,000 tonnes of wheat.

The Chief Secretary said the provincial government aimed to have at least 1.5 million tones of wheat in its own stocks, and the same quantity was likely to be supplied by the private parties to the local market to meet the estimated 3 million tones of wheat requirement for the province until the start of next harvest.

Pakistan is embarked upon a sustainable and inclusive growth and all the economic indicators and recent developments signify the strength and reliability of overall economic performance of the government in reinvigorating the economy, spurring growth, maintaining price stability, providing jobs to the youth and rebuilding key infrastructure of the country.

“The Government is committed to correcting fundamentals of the economy through effective policy making and targeted reforms with an aim to achieve sustainable and inclusive growth trajectory,” says a detailed statement issued by the Ministry of Finance to coincide with the Independence Day of Pakistan.

The present government started its journey with economic vision of getting sustainable economic growth through improving efficiency, enhancing productivity and increasing investment. In this regard, a comprehensive agenda of economic reforms has been initiated through structural reforms rather than taking the usual route of pricing and fiscal adjustments. The measures are focused on establishing and strengthening the economy which is not only self-reliant but also capable of competing globally.

At the start of the fiscal year 2020, the economy started to observe a remarkable turnaround endorsing the government timely and much-needed policy actions requisite for addressing the macroeconomic imbalances. Resultantly, the economy started moving progressively towards sustainable and inclusive growth. The measures paid off in terms of improved external and fiscal accounts, stability in exchange market, growing investor confidence, tame down inflation. Thus, resulting in controlling twin deficits indicated that the economy has started moving towards sustainable growth.

The external sector has been stabilized as the current account deficit narrowed by 77.9 percent during FY2020. Pakistan’s exports were performing better till February 2020 than most of its competitors despite the challenging external environment.

Remittances increased to a historic high level of $ 23.1 billion as compared to $ 21.7 billion last year, with a growth of 6.4 percent. Foreign Direct Investment (FDI) increased by 88 percent and reached to $ 2.6 billion during FY2020 as compared to $ 1.4 billion in FY2019.

To further strengthen the external sector, the second phase of the Pak-China Free Trade Agreement was implemented. This will provide an opportunity to Pakistani manufacturers and traders to export around 313 new products to the Chinese market on zero duty. In addition, National Tariff policy has been approved to remove anomalies in import duties structure which will be used as an instrument to catalyze industrial production for enhancing exports. Similarly, the E-Commerce policy has also been approved with vision of creating business friendly environment for holistic growth in all sectors especially E-commerce across the country.

Similarly, government’s various efforts remained supportive in improving fiscal accounts as all major fiscal indicators witnessed a visible improvement despite challenges in these difficult times of COVID-19 with requisite fiscal stimulus package. The improvement is realized due to government’s prudent fiscal strategy to improve the revenues through comprehensive tax measures and administrative reforms along with expenditure rationalization.

During FY2020, fiscal deficit contained at 8.1 percent of GDP against 9.1 percent of GDP in last year. The decline in fiscal deficit has been realized on account of impressive growth in total revenues (28 percent) relative to the growth in total expenditures (15.6 percent). Non tax revenues posted an historical impressive growth of 257 percent while tax revenues grew by 6.1 percent in FY2020 over the last year.

Similarly, the primary balance which remained in surplus during first nine months of FY2020 converted into deficit by the end of FY2020 but still contracted to 1.8 percent of GDP compared to 3.6 percent of GDP last year.

Within revenues, FBR tax collection grew by 4.4 percent to stand at Rs.3,998 billion in FY2020 against Rs.3830 billion in FY2019. It is worth mentioning FBR collected Rs.91 billion more than the revised target set for FY2020 even when economic activities were suffering from lockdown due to COVID-19.

Despite major developments, the government remained well aware of the challenges emerged due to stabilization measures like economic slowdown, price stabilization, low pace of job opportunities and resultantly its impact on the lowest income groups of the society. Keeping in view the painful impact of these policies, the government has initiated reforms in key sectors of the economy encompassing agriculture, industrial and services sectors.

To stimulate agriculture sector, the government has announced a National Agriculture Emergency Program. Under this program, thirteen mega projects at the cost of Rs 277 billion are under execution. While to promote industrial sector in general and to manufacturing sector in particular the government has continued to provide Long-term Trade Financing (LTFF) and Export Finance Scheme (EFS) at subsidized rate (LTFF 6%, EFS 3%); construction package; tax refunds and deferment of interest payments; “Chota Karobar-o-Sannat Imadadi Package” to support SMEs; and subsidies to industry for electricity and gas.

To provide relief to the vulnerable segments of the society, targeted poverty reduction interventions have been made through Ehsaas program, BISP, SehatSahulat program and expanding coverage of Waseela-e-Taleem program etc.

The government made efforts to control the price hike which happened increase in international commodity prices. And due to requisite upward adjustment in overdue gas and electricity prices, market-based exchange rate adjustments required for correcting macroeconomic imbalances. Thus, the government made ensure smooth supply of commodities by making strict measures against hoarding, smuggling and undue profiteering. Also, a vigilant monitoring of prices both at federal and provincial level was ensured. Further, under the PM’s relief package, Rs.10 bn has been released to the Utility Store Corporation. Moreover Rs. 21 billion has already been disbursed to the USC for basic food items. Similarly, the government is taking several steps to reduce the prices of items of daily use, particularly wheat flour and sugar, and planning “targeted subsidy” to provide relief to the deserving persons. Overall, the emphasis has been on price control through different policy, administrative and relief measures.

Job creation is one of the key objectives of economic reform agenda of the Government for which National Agriculture Emergency Program, “KamyabJawan Program (low cost loans to youth for business)”, “Naya Pakistan Housing Program” to construct 5 million houses in 5 years and Ten Billion Tree Tsunami have been launched. The schemes will generate sizeable employment. In addition, approval of a new ‘Shipping Policy’, ML-1 Railway Line Project under CPEC, incentive plan for the building and construction sector and Amazon Data Services Pakistan (Pvt) Ltd (to bring its cloud computing business) will further stimulate the employment generation activities.

By the end of FY 2020, Pakistan’s economy suffered from COVID-19 out break through various channels like declines in domestic & global demand, lower tourism and business travel, trade & production linkages and supply disruptions, etc. The last quarter of fiscal year 2020 bore the most significant brunt of the COVID-19 crisis. Prior to pandemic, GDP growth was estimated at 3.24 percent for FY2020, with agriculture 2.85 percent, industry 1.95 percent and services 4.04 percent. However, FY2020 posted a negative growth of 0.4 percent (Provisional) against 1.91 percent (Revised) recorded in FY2019 on the basis of 2.67, -2.64 and -0.59 percent growth in agricultural, industrial and services sectors, respectively.

The Government devised a comprehensive strategy to prevent the spread of the COVID-19 through early diagnose, tracing and tracking of contacts, risk communication, social distancing, quarantine and isolation. It has been recognized globally that Government of Pakistan has acted in a timely manner to mitigate the adverse effects of the pandemic and to preserve the socio-economic gains achieved through reforms agenda especially the largest ever Fiscal Stimulus package of Rs 1,240 billion that covers Emergency Response, Support to Business and Relief to Citizens. Further, a Relief package for Construction Sector was announced, so that the lower income group associated with this sector may continue fulfilling their daily lives.

The government has launched “Ehsaas Emergency Cash Program” with total allocation of Rs 144 billion to provide immediate cash relief of Rs 12,000 to 12 million families of daily wage earners. Now, the Ehsaas Emergency Cash Program has completed its original target of distribution of funds to over 12 million beneficiaries, the government has set a new target of 16.9 million beneficiaries and budgetary allocation raised to Rs 203 billion.

In order to meet the financing requirement for these expenditures, additional resources have also been mobilized through various international financial institutions including IMF, World Bank, Asian Development Bank (ADB) etc. As the new fiscal year 2021 started, early signs of economic recovery have started to unfold in terms of better tax collection by FBR and significant growth in exports.

The improvement in economic activities can be seen since the start of new fiscal year FY 2021. After four months of decline, export from Pakistan registered an increase of 25 percent in July 2020 on MOM basis and 6 percent on year on year basis indicating a rebound in export-oriented industries. While Imports reduced by 2.0 percent to $ 3.6 billion against $3.7 billion last year. Consequently, trade deficit reduced by 10.2 percent to $1.6 billion against $1.8 billion last year.

FBR tax collection witnessed an impressive performance as it grew by 4.7 percent to Rs.290.5 billion against Rs.277.3 billion last year. While the actual tax collection has surpassed the target of Rs.243 billion set for July, FY2021.

Similarly, on monthly basis, LSM has started showing signs of recovery as it posted a positive growth of 16.8 percent in June, 2020 over May, 2020. Another important indication of economic recovery is significant rise in total cement dispatches. It increased by 37.8 percent to 4.838 million ton in July-2020 compared 3.512 million ton in July-2019 while Domestic consumption increased by 32.7 percent to 3.953 million ton in July-2020 compared to 2.979 million ton in July-2019.

It is worth to mention that the Government initiatives and subsequent achievements were appreciated by the IFIs, in particular, IMF in its review (December, 2019) appreciated that decisive policy implementation by the government is helping to preserve economic stability. In December 2019, Bloomberg ranked Pakistan Stock Exchange as one of the top performing markets of the world.

International rating agencies S & P and Fitch appreciated government efforts and affirmed Stable Outlook. Recently, Moody’s has confirmed Pakistan’s rating at B3 with a stable outlook as external financing needs have declined relative to fiscal 2019 because of a narrower current account deficit, which occurred as a result of the macroeconomic adjustments over the past two years and continues to be supported by effective policies.

Pakistan ranked among ‘top ten best improvers’ in World Bank’s Ease of Doing Business Index 2020, Jumping up 28 places on the index and clinching the 108th position. Annual Security Survey 2020 conducted by Overseas Investors Chamber of Commerce and Industry (OICCI) in which foreign investors has shown overall high level of satisfaction on the fast-improving security environment in the Pakistan. This stance of foreign investors will surely help the economy by boosting up FDI.

Economic Coordination Committee (ECC) of the Cabinet has given principled go-ahead to the payment of all liabilities and responsibilities resulting from a debt of US$ 105 million secured by the Pakistan International Airlines Corporation Limited (PIACL) owned Roosevelt Hotel in Manhattan, New York.

The ECC meeting chaired by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh also asked the Finance Division to engage with Law Division, Aviation Division and Planning Planning Commission to formalise the mode of payment/refinancing as per schedule of the loan contracted by the Roosevelt Hotel to meet its financial challenges, and submit to ECC in its next meeting for formal approval.

The ECC also took up and approved a proposal by the Cabinet Division for re-allocation through technical supplementary grant of lapsed funds of Rs 8.01 billion under sustainable development goals achievement programme (SAP) to respective Ministries and Divisions.

The ECC also discussed and approved amendments to the Import Policy Order 2016 to streamline international trade in live animals and their meat products in accordance with the international rules and practices.

The ECC also approved a proposal by the Finance Division to allow the Asian Development Bank to launch Offshore Pakistan Rupee (PKR)-Linked bonds based on conducive market conditions.

The ECC also considered approved a revision in key terms of Prime Minister’s Kamyab Jawan Youth Entreneurship Scheme for making the scheme accessible to all Pakistani citizens meeting the laid-down criteria.

The ECC also okayed a proposal by the Ministry of Inter-provincial Coordination for grant of exemption from payment of annual renewal fee of licences issued to travel and tourism related business. The financial impact of the one-year fee exemption comes to approximately Rs 17 million.

The ECC also took up the rescheduling/restructuring of financing facilities and deferment in re-payment of principal loan amount by one year upon a written request of the borrowers received before 30th June 2020 to mitigate the effects of COVID-19, and extended the same facility to borrowers under Prime Minister’s Youth Business Loan Scheme (PMYBL) and Prime Minister’s Kamyab Jawan Youth Entrepreneurship Scheme upon written requests received before 30th September 2020 provided the borrowers would continue to service the mark-up amount as per the agreed terms and conditions of the relevant scheme.

The ECC also approved a proposal for additional funds equal to US$ 3 million for contribution towards SAARC COVID-19 Emergency Fund announced during the video conference of SAARC leaders in March 2020. The ECC was told that similar contributions from other member countries had also been announced.

The ECC also discussed and approved a supplementary grant of Rs 540 billion having remained unutilised due to procedural conditions under the COVID-19 relief measures announced in FY2020-21.
The ECC also considered a proposal by the Revenue Division for arrangement of Rs 40 billion for payment of Income Tax refunds of up to Rs 50 million pending since 2013. The ECC approved the proposal and asked the Finance Division to arrange the required funds. The Chair also asked FBR to apprise the ECC of current status of pending refunds with the observation that payment of refunds to the taxpayers was the topmost priority of the government and taxpayers had already been given Rs. 250 billion tax refunds in the outgoing financial year, which was more than double the amount of refunds paid to taxpayers in the previous year.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of the Executive committee of the National Economic Council (ECNEC) here at the Cabinet Division today.

The project of Pakistan Railways for”Up gradation of Pakistan Railways existing Mainline-1 (ML-1) and establishment of dry port near Havelian “was also approved by ECNEC at the rationalized cost of US$ 6,806.783 million on cost sharing basis between the governments of China and Pakistan. The execution of the project shall be in 3 packages and in order to avoid commitment charges, the loan amount for each package will be separately contracted. Under this project existing 2,655 KM track will be upgraded. The speed of passenger trains shall increase from 65/110 KM/h to 165 KM/h and line capacity will increase from 34 to 137/171 trains each way per day. Ministry of Railways would constitute a project steering committee for effective supervision and implementation of the project.

ECNEC approved the Pakistan Single Window (PSW) project, FBR shall be the sponsoring agency for this project. The total cost of the project shall be Rs.11,074.16 million including Rs.9,020 million as FEC. The project shall be completed by June 2023 and it is expected to enhance Pakistan’s global ranking in cross border trade related indicators. It will also serve as the integration point bridging cargo/logistics systems and other trade related processes. The project will provide an automated single-entry centralized hub for submission and processing of 90% of the licenses, permits, certificates and other documents (LPCOs) for external trade.

ECNEC also approved the change in cost sharing ratios of ADB and its co-financing Partners for “Construction of BRT Red Line Project, Karachi” at the total cost of Rs 78,384.33 million including FEC of Rs.66,378.33 million (with cattle based biomethane as fuel technology). The project was already approved by ECNEC on 29th August 2019.

Ph.D. Scholarship Program under US-Pakistan Knowledge Corridor (phase-1) was also approved by ECNEC at the revised cost of Rs. 25,226.274 million including FEC of Rs. 24,303.543 million. In the revised PC-1 the scope of the project has been curtailed to 1000 scholarships (from 1500 scholarships) mainly due to appreciation of dollar rate against pak-rupee and inclusion of tuition fee/ research grant.

Economic Coordination Committee (ECC) of the Cabinet has approved a proposal by the Ministry of Energy for revision of prices of petroleum products on fortnightly basis instead of the existing monthly basis.

The ECC chaired by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh also gave go-ahead to a proposal by the Ministry of Industries and Production for import of up to 300,000 tonnes of refined white sugar to maintain buffer stocks and prevent any shortage of sugar in the coming months before the start of next crushing season.

The ECC decided to adopt a revised pricing methodology for motor gasoline and high speed diesel on a fortnightly basis, based on Platts average, in view of its advantages for ensuring fair competition, alignment of margins with international pricing trend and smoothing out of volatility and distortions because of purchasing dates of one OMC.

The revision of oil prices on fortnightly basis, coming into effect from 1st August 2020 subject to endorsement from the federal Cabinet, would also allow for planning for three months ahead with refineries and OMCs, better inventory management, better reporting of sales and enforcement of stock requirements, transparency and visibility of prices and reduced dependence on one OMC. 

As per the existing system, the prices of petroleum products are determined by allowing refineries to fix and announce the ex-refinery sale prices on a monthly basis subject to the condition that the ex-refinery price of the petroleum products cannot be more than the PSO’s average actual landed import price of previous months.

The ECC also considered a proposal by the Ministry of Industries and Production for import of refined sugar by the Trading Corporation of Pakistan (TCP) to maintain buffer stocks, and allowed import of up of up to 300,000 metric tonnes of white sugar through a mode of procurement and other modalities to be decided by a three-member committee comprising Secretary Industries and Production, Secretary Commerce and Secretary Finance. The ECC also asked the Committee to seek input from the Law Division on the preferred mode of procurement and report to ECC in its next meeting.

On a proposal by the Finance Division, the ECC approved upgradation of Habib Bank Limited representative office in Beijing to branch and remittance of RMB 300 million being capital of proposed branch from Pakistan.

The ECC also allowed exemption from the Re-lending Policy of the Government of Pakistan a proposal by the Ministry of Climate Change for seeking AFD loan of USD 20 million as part of Emergency Assistance for Fighting against COVID-19 Pandemic for strengthening health workforce capacity, adopting infection minimisation measures and supporting implementation of COVID-19 National Action Plan across Pakistan.

The ECC also considered and approval a technical supplementary grant of Rs 340 million for the operationalisation of Swat Motorway.

ECC approves markup subsidy for housing finance under Naya Pakistan Housing & Development Authority.

Adviser to Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of the Economic Coordination Committee of the Cabinet(ECC) today at the Prime Minister office.

ECC decided to allocate 150,000 metric tons of wheat to the Pakistan Army from PASSCO resources on payment basis for the year 2020-2021. ECC also approved the prices of tobacco recommended by the Price and Grade Revision Committee in pursuance of section 8(1) of the PTB Ordinance 1968. ECC also directed that the MNFSR shall also give a detailed presentation on the mechanism of determination of prices and will also point out the gaps in the system.

ECC also approved “Mark up subsidy for Housing Finance”, proposed by Naya Pakistan Housing and Development Authority. Honorable Prime Minister has on July 10, 2020 announced special incentives for housing and contruction sector to revive economic development amid Covid-19 pandemic. Markup subsidy shall be provided for 10 years on bank financing. Accordingly, end user markup rate on housing units measuring up to five marla will be five percent for first five years and seven percent for next five years. For housing units measuring 10 marla, end user markup rate will be seven percent for first five years and nine percent for next five years. The subsidy will be given on units where the price of the housing unit does not exceed Rs.3.5 million for 3-5 Marla and is not more than Rs.6 million in case of 10 Marla House. Rs 33 billion were allocated for the loan tenor of 10 years with Rs. 4.77 billion to be allocated in the current financial year for the payment of markup this year.

ECC also approved allocation of Rs. 41.8 million for Ministry of Information Technology and Telecommunication/ NITB for deployment of systems, data analysis, modeling and mobile apps for NCOC stakeholders and Government Departments with the instructions that wherever possible the budget may be rationalized/ minimized with the consultation of Finance Division.

ECC also approved the Establishment of Balochistan Mineral Exploration Company Limited with the support of the Federal Government. It will be joint venture of GoP with the Government of Balochistan for formation and operations of BMEC with 10% shareholding amounting to Rs320 million to be injected in two equal tranches through Pakistan Mineral Development Corporation. The Petroleum Division and PMDC are authorized to execute the shareholders agreement and complete all required legal, regulatory and corporate formalities in connection with formation, incorporation and equity participation in BMEC.

Ministry of National Food Security and Research brought a proposal to the ECC on (utilization) of the Fiscal package of Rs.100 billion allocated for the Agriculture and SME sector out of the 1200 billion fiscal package of the PM on Covid -19. On the request of the MNFSR, ECC approved allocation of Rs 15.7 billion , earmarked for nitrogenous fertilizers to be diverted to phosphate and Potash fertilizers. It was also decided to immediately release and disburse the subsidy on whitefly pesticides. Rs 1.5 billion subsidy for tractors and markup of Rs. 6.8 billion on all loans for 12.5 acres of land holdings disbursed by ZTBL with passbook as collateral for FY 2020-21 only (to be adjusted through book and tax adjustment of SBP and FBR respectively) were approved. ECC directed MNFSR to properly monitor and evaluate the mechanism of disbursement of various subsidies for maintaining transparency of the system and to ensure that benefit reaches to the small farmers.

A meeting of the National Price Monitoring Committee (NPMC) was held here at the Finance Division with Additional Finance Secretary (Exp) in the chair to discuss the price trend of essential food items.

The meeting was attended by the representatives from the provincial governments, Islamabad Capital Territory, Ministries of Industries, Interior, Commerce, Planning, Development & Special Initiatives, National Food Security & Research, Federal Board of Revenue, Competition Commission of Pakistan and Pakistan Bureau of Statistics.

The Chair advised the relevant authorities and the provincial governments to ensure smooth supply of essential food items at affordable prices and remove price disparity. The Chair further directed the CCP to play a proactive role to check cartelization and other anti-market practices.

Earlier, the meeting was informed that CPI inflation year on year was recorded at 8.6 % in June 2020 over June 2019 and July-June CPI inflation on average rose to 10.7%. It was noted that inflation had been on declining trend till May 2020 but had been slightly up during the month of June 2020. It was also observed that price trend in international market was also following a rising trend on account of higher demand due to ease of lockdown conditions.

The meeting was told that the government in consultation with all stakeholders was taking proactive measures to control the general price level of daily use items at the federal, provincial and district levels. It was noticed that the Sensitive Price Indicator (SPI) which monitors the price movement of 51 essential items on weekly basis, had recorded an increase of 0.98% for the week ended on 09th July, 2020.

The Chair discussed the rise in prices of poultry products with all stakeholders and also examined the demand and supply dynamics. Provincial governments and ICT were directed to take necessary measures to ensure smooth supply of poultry products at reasonable prices. The pre-Covid and post-Covid prices of face masks, sanitizers and oxygen cylinder were also came under discussion. The provinces and ICT Administration were asked to take necessary measures for provision of such items at reasonable prices.

The role of middle men was also discussed in detail being responsible for increase in general price level of commodities and need to check the high profit margins. The Chair also appreciated the ICT, Sindh and Punjab governments for online delivery system of essential food items on wholesale prices at the doorstep of consumer. The Chair stressed that the same may be extended to other districts of the provinces. The Chair also urged that this model should be replicated by the Provinces of Khyber Pakhtunkhwa and Balochistan.

Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh has directed the FBR to make payment of all Income Tax refunds of up to Rs 50 million in the next couple of weeks while a clear roadmap and strategy may be adopted for the payment of remaining refunds.

“The government has a clear policy that all tax refunds, whether fresh or old, should be paid back without any excuse,” he said while chairing a meeting at the Finance Division. Minister for Industries and Production Muhammad Hammad Azhar, Minister for Power Omar Ayub Khan, Adviser to the Prime Minister on Commerce Mr. Abdul Razak Daqood, Special Assistant to the PM on Petroleum Nadeem Babar, Chairman NA Standing Committee on Finance and Revenue Faizullah Kamoka and Chairman FBR Javed Ghani were also present while a number of businessmen from different parts of the country attended the meeting on Zoom.

Dr Abdul Hafeez Shaikh told the meeting that the government last year paid tax refunds to the tune of Rs 140 billion, nearly double than the amount of refunds paid in FY/18-19. Similarly, the government had also started payment of Income Tax refunds, starting with payment of Income Tax refunds of upto Rs. 18 million in the first phase. It said Income Tax refunds of Rs 50 million will be cleared in the next phase which would be completed within the next two weeks and a total of Rs 40 billion would be spent to pay off all Income Tax refunds of Rs 50 million.

The meeting also discussed issues pertaining to the allocation of power and gas subsidy to the zero-rated and export sector and decided to convene another meeting to build consensus on using the Rs 20 billion kept for the current year for the gas and power subsidy.

Executive Committee of the National Economic Council (ECNEC) has approved four projects worth Rs 289 billion for construction of national highways in different parts of the country.

The ECNEC meeting chaired by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh discussed and gave go-ahead to the projects, including construction of 306-km long Hyderabad-Sukkur Motorway at a cost of Rs 165.679 billion, construction of 47.55-km Khyber Pass Economic Corridor (KPEC) Project at a cost of Rs 77.907 billion, construction of 146-km Hoshab-Awaran-Khuzdar Section of M-8 Project, and land acquisition for Swat Motorway Phase-II at a cost of Rs 20 billion.

The Hyderabad-Sukkur Motorway project to be completed on Built Operate Transfer (BOT) basis envisages construction of 306 km long, 6-lane wide, access-controlled motorway. The motorway is proposed to be a high speed toll road facility for efficient and safe transportation, which will start from Hyderabad (end of Karachi-Hyderabad Motorway M-9) and terminates at Naro Canal (Start of Sukkur-Multan Motorway M-5). The project alignment passes through Jamshoro, Tando Adam, Hala, Shahdadpur, Nawabshah, Moro, Dadu, Naushahro Feroze, Mehrabpur, Rasoolpur, Larakana, Khairpur and Sukkur.

The Khyber Pass Economic Corridor (KPEC) project consists of two components involving construction of Peshawar-Torkham Motorway and link road connecting motorway to Badabher (N-55) intersecting N-5 between Chamkani and Jhagra (55km) in length. The project envisages construction of 47.55 km long, 4 lane wide, dual carriageway high-speed access controlled Motorway from Peshawar to Torkham. Peshawar Torkham Motorway is part of the Peshawar-Jalalabad-Kabul Motorway Project. The scope of work also includes construction of bridges, interchanges, flyover, subways, underpasses, box culverts, cattle creep, road furniture, drainage works, and retaining walls alongwith allied facilities.

Hoshab-Awaran-Khuzdar Section of M-8 Project envisages construction of 146 km long road from Hoshab to Awarn . There exists motorable track from Hoshab to Awaran under administrative control of C&W Department, Govt. of Balochistan. Existing route is mostly followed while finalizing the alignment. The project road starts from Hoshab and traverses through Qila Darwesh, Ashal, Dandar, Sahar Kalat, Gorari, Laljan, Duddar, Razai, Nurdin, Madak, Malar, Labach Dargo and finally terminaters at Awaran. The scope of works also includes relocation of utilities and acquisition of 29,200 kanals of land for 100m of Right of Way (ROW).

The Swat Motorway Phase-II project envisages acquisition of 10,000 kanals of land for construction of 04-lane motorway 79.69 km in length from Chakdara to Fatehpur as Phase-II – extension of the Swat Motorway. The motorway is proposed as a high speed toll road facility for efficient and safe transportation. The Right of Way proposed for the motorway is 50m.

Adviser to Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of the ECC today at the Prime Minister’s office. In order to ensure the availability of wheat and atta in the country throughout the year and on affordable price ECC directed Ministry of National Food Security and Research to accelerate efforts for wheat imports. ECC directed that the Ministry of NFSR should hold meeting with the major importers of wheat at the earliest and come up with proposals that may indicate that what will be the expected price of the imported wheat and if there is any need for the government to allow subsidy on the product to keep the prices stable in the domestic markets. Ministry of NFSR briefed the ECC that combined together the Provincial governments and PASSCO have already achieved 79% of their procurement targets. More than 120 importers have so far shown interest to import wheat in the country. ECC directed Ministry of NFSR to extend requested facilitation to the importers including waivers of different taxes and duties. It was also assigned by the ECC that Provincial Governments, Trade Corporation of Pakistan and PASSCO may arrange wheat imports as soon as possible to avoid shortages any time during the year.

ECC also allowed Asian Development Bank to issue offshore Pakistan Rupee Linked Bonds for international investors subject to completion of all codal formalities. The program, according to the recommendation of SBP, shall be restricted to maximum of US$200 million. The local currency proceeds of the Bonds shall be used for financing long term infrastructure and energy projects in Pakistan.

ECC also allowed Finance Division to release Rs. 1 billion to SSGCL for undertaking gas supply to localities/ villages falling within 5 KM radius of gas fields in order to comply with Supreme Court and High court decisions.

ECC allowed equity investment abroad amounting to SAR 22.5 million by Eastern Products Ltd. On this occasion ECC also approved the increase of limit for investments abroad (to be approved/allowed by SBP) from US$5 million to US$10 million beyond which the permission will have to be sought from ECC.

For the implementation of the E-office program, ECC directed Ministry of Information Technology and FIA to withdraw complaint against LMKR as well as withdrawal of all inquiries by FIA on projects of LMKR subject to fulfillment of agreement clauses. Ministry of Planning Development and special initiatives was directed to activate the project on the request of NITB and provide requisite funds to complete the work.

Five projects of different types of development works in North West Industrial Zone and South West Industrial Zone by Port Qasim Authority with their own funds were approved by the ECC with the direction to the Ministry and PQA to observe all the codal formalities for the completion of the projects.

Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh has said that Pakistan as a responsible member of international community continues to ensure earliest completion of the FATF Action Plan through increasing the effectiveness of its AML/ CFT Regime.

He said that out of 27 FATF Action Plan Items, Pakistan had already addressed 14 FATF Action Plan items while substantial progress had been made in addressing remaining 13 Action Plan items. He was delivering a keynote statement through Zoom to the High Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda to contribute to the implementation of the 2030 Agenda for Sustainable Development.

The FACTI Panel discussed among others the overall efforts undertaken by Member States to implement comprehensive international frameworks related to financial accountability, transparency and integrity critical to financing the Sustainable Development Goals. H.E. Mr. Tijjani Muhammad-Bande, President of the General Assembly and H.E. Ms. Mona Juul, President of the Economic and Social Council, were also part of the High Level Panel.

Dr Abdul Hafeez Shaikh told the panel that Pakistan had made considerable progress in addressing the recommended actions of Mutual Evaluation Report which includes 15 Legal Amendments to meet technical compliance, updation of National Risk Assessment on ML/CT, implementation of AML/CFT measures on DNFBPs, CDNS and Pakistan Post, broadening the sanction regime etc.

Similarly, he said the Government of Pakistan had taken various measures in recent years to contain illicit financial flows through strengthening of the AML/CFT regulations AML/CFT Regulations on Customer Due Diligence (CDD) and Know Your Customer (KYC)/ and other AML/CFT instructions to financial institutions have been brought in line with FATF standards. To further align with the International standards, the AML Act had been amended to include Tax Offences as predicate offences. A range of predicate offences have been added to the schedule of AML Act, to include serious offences including corruption, narcotics, terrorism and human trafficking, he added.

Dr Abdul Hafeez Shaikh told the panel that Violations of Section 4(1) (un-authorized FX business) and Section 5 (Illegal transfers) of Foreign Exchange Regulation Act ( FERA), 1947 had been incorporated into the schedule of Anti Money Laundering (AML) Act, 2010 in terms of which those offences might also be punishable under AML, Act, 2010.He said amendments to Protection of Economic Reforms Act (PERA) 1992 had been incorporated to restrict feeding of foreign currency accounts by Non Tax Filers Pakistani Residents.

The Adviser said that Pakistan had launched Pakistan Remittances Initiative (PRI) to facilitate inflow of home remittance into Pakistan through formal channels. Resultantly, Pakistan had registered growth in remittances during the last decade, rising from $ 6.4 billion in FY08 to $ 23 billion in FY20. Automation of Electronic Import Form (EIF) and Electronic Export Form (EEF) by banks through Pakistan Customs’ software - Web Based One Customs (WeBOC) to synchronize import and export of goods and payments by banks were also some of steps taken by the government to further streamline the processes. He said the State Bank of Pakistan and Federal Investigation Agency of Pakistan were continuing to identify illegal MVTS (hawala/ hundi operators) and take measures including closure, investigation and prosecution these operators.

In his statement, Dr Abdul Hafeez Shaikh also called upon the Panel to look into how multinational corporations minimize their tax liabilities to revenue authorities in their country of operations. He observed that MNCs had devised sophisticated financial and operational models enabling them to maneuver their way through tax systems and shift their profits to low tax jurisdictions and, in many instances, tax havens that are highly opaque in nature.

He said the Panama Papers highlighted the myriad ways in which the rich could exploit secretive offshore tax regimes – and widen the gulf between rich and poor. Abuse of anonymous shell companies is among the reasons why many countries are facing greater challenges today in the face of the COVID-19 pandemic. For years, they have enabled corruption, fraud and tax evasion, he said.

He also drew the attention of the panel to a research by Transparency International showing that the overall level of compliance on the part of countries with beneficial ownership transparency standards was low, as many countries had failed to take adequate measures such as the establishment of registers. Asset recovery by developing countries has been slow and legal framework remains cumbersome, he noted.

The ECC chaired by Adviser to the Prime Minister on Finance and Revenue Dr. Abdu Hafeez Shaikh allowed the BISP to spend Rs 29.72 billion from its allocated budget of Rs 200 billion for 2020-21 for providing cash transfers to 3.72 million applicants with the instruction that any additional requirement for regular operations of BISP would be also provided during 2020-21.

The decision came after the Poverty Alleviation and Social Safety Division told the ECC that 3.151 million applicants who had applied for assistance through the SMS, were found eligible under the approved criteria but these applicants could not be provided assistance on account of provincial/district quotas.

The ECC was told that the Punjab government had already agreed to provide assistance to 700,000 of the applicants identified through SMS, leaving 2.451 million eligible applicants who could be provided cash assistance @12,000 (Rs 3000 for four months) at a total cost of Rs 29.72 billion.

During the meeting, the ECC also took up a proposal for policy guidelines with respect to sale price of RLNG. The ECC was told that given the ring-fenced nature of RLNG and indigenous gas pricing, the sale of RLNG to domestic gas consumers at weighted average domestic tariff/gas sale price on M/s SNGPL network had resulted into accumulative tariff differential/RLNG revenue shortfall of Rs 73.84 billion for the period July-2018 to April 2020. The ECC was further told that this revenue shortfall had occurred after adjustment of RLNG impact on cost neutral basis as per the policy whereby the SNGPL sold indigenous gas as RLNG to its consumers and recovered some of the revenue shortfalls whenever the surplus system gas became available.

The ECC was also briefed that the issue of RLNG revenue shortfall had arisen mainly because of the price differential in domestic gas as 91 per cent of the domestic gas consumers had been paying an average monthly bill of Rs 121 which was many times less than the price of imported RLNG supplied to domestic consumers in the winter months.

The ECC considered the proposal and asked the OGRA to review it, especially the RLNG revenue shortfall as worked out by the SNGPL, and report back to ECC. The ECC also decided to further discuss the issue in a small group in order to develop a consensus-based solution to the issue for a policy decision at the government level to avoid the creation of a circular debt situation in the RLNG sector.

The ECC also took up and approved a proposal by the Ministry of Information Technology and Telecommunication for NTC’s Budget for the FY 2020-21 (Budget Estimate Revenue Rs 4.59 billion, operating cost Rs 4.38 billion and ADP Rs 1.23 billion) and NTC Budget for FY 2019-20 (Revised Estimates Revenue Rs 3.95 billion, operating cost Rs 3.93 billion and ADP Rs 1.08 billion).

The ECC also took up a proposal by the Ministry of Industries and Production which submitted that as per the data furnished by National Fertilizer Development Centre (NFDC), the national inventory for Urea fertilizer would be below the buffer stock level of 200,000 metric tonnes in the months of December 2020 to February 2021. The ECC decided that in order to cover this gap and maintain the buffer stocks at the required level, gas at rate of Rs 756 MMBTU be provided to two shutdown plants at SNGPL networks, namely Agritech and Fatima Fertilizer, for three months w.e.f. July-September. This would involve the GoP’s share at Rs 959 million much less than the revenue spent previously on using these plants to produce the Urea fertilizer to cover up the shortage.

The ECC also discussed the issue of quarterly adjustments of K-Electric Limited for the period from July 2016 to March 2019 and affirmed its previous decision of 26th March 2020 whereby recommendations of a Committee constituted by ECC in its meeting on 4th March 2020 to settle the issue of quarterly adjustments of the of K-Electric Limited for the period from July 2016 to March 2019 were approved with the instruction that the same would be effective after three months.

The Government has decided to revise the existing prices of petroleum products in view of the rising oil prices trend in the global market.

The new prices effective from 26th June 2020 are as follows: (Rs/Liter)

Economic Coordination Committee (ECC) of the Cabinet has approved revised standard security package documents such as implementation agreements (GOPIA), GOP guarantee, power purchase agreement (PPA), water use agreement (WUA) under Policy for Power Generation Projects 2002 for the hydropower projects in the private sector.

The ECC chaired by Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh also decided in favour of removal/reduction of regulatory duty on the smuggling prone items, including fabric, sanitary ware, LED/TVs, padlocks, blankets, electorodes etc.

The ECC also took up five proposals for technical supplementary grants and approved them all, including Rs 4.313 billion TSG for employee related expenditure by the Interior Division, Rs 900 million TSG for adjusting pays and allowances of the employees of National Commission for Human Development, Rs 52.70 million TSG for necessary expenditure by the Revenue Division, Rs 39.22 million TSG for the necessary expenditure by the Pakistan Rangers and Rs 18.53 million TSG for the Islamabad administration for taking measures to control and fight the COVID-19 pandemic in the federal capital. 

The Cabinet Committee on the State-owned Enterprises (CCoSOEs) met here today to discuss the governance reforms on the state-owned enterprises and the reconstitution of the Board of Directors of Sarmaya-i-Pakistan Limited.

The CCoSOEs meeting chaired by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh decided to set up a sub-committee headed by Minister for Industries and Production Muhammad Hammad Azhar to study the status and implementation of the recommendations of Task Force on Austerity and Government Restructuring Report on restructuring and reorganisation of the federal government.

Earlier, the CCoSOEs was informed by the Ministry of Finance that around 85 commercial SOEs were working under the administrative control of 19 federal ministries/divisions but the overall performance of the SOEs had remained unsatisfactory despite considerable financial support provided by the federal government from time to time.

The meeting was further informed that during FY2017-18 an amount of Rs 143 billion was provided to various SOEs as subsidies, Rs 204 billion as cash development loan, Rs 27 billion as equity injection and GoP guarantees amounting to Rs 318 billion were issued. Despite such a large support, the SOEs sector as a whole registered net losses of Rs 265 billion.

The Ministry of Finance in its presentation attributed the poor performance of the SOEs to various factors, particularly redundancies and duplications, a completely decentralised governance framework with lack of inter-agency coordination, excessive interference and over-regulation by multiple government agencies and lack of technical expertises and specialised skills in the line ministries for the management of commercial COEs.

The Ministry of Finance also briefed the CCoSOEs on various steps taken for reforms and improvement in the SOEs governance framework, including Sarmaya-i-Pakistan and structural benchmarks agreed with the international financial institutions. It further updated the members of the Committee of legal framework being developed for the liquidation, privatisation and retention under the government ownership on the basis of economic rationale and financial performance of SOEs.

Advisor to the Prime Minister on Institutional Reforms and Austerity Dr. Ishrat Hussain briefed the meeting on the gist of proposals of the Task Force on Austerity and Government Restructuring Report on restructuring and reorganisation of the federal government.

He opined that the Task Force’s proposals which had already been approved by the federal cabinet and were being implemented at different levels by the federal government could be a starting point for the CCoSOEs to see and decide which SOEs were to be privatised, which to be liquidated, wound up or closed down and which were to be reorganised and retained by the government or merged with other entities.

The meeting appreciated the work done by Dr. Ishrat Hussain and his team and decided to constitute a team led by Minister for Industries and Production Muhammad Hammad Azhar to study the status and implementation of the recommendations of Task Force on Austerity and Government Restructuring Report on restructuring and reorganisation of the federal government and report to the CCoSOEs in its next meeting to be held soon.

The Committee headed by Muhammad Hammad Azhar would include representation from the Finance Division, Privatisation Commission and the office of the Advisor to the Prime Minister on Institutional Reforms and Austerity.

Economic Coordination Committee (ECC) of the Cabinet has given go-ahead to the private sector to import wheat to control prices of wheat and flour in the market and to ensure availability of wheat and flour at reasonable price across the country throughout the year.

The ECC chaired by Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh also decided not to restrict the import of wheat to any limit by the private sector and further decided to monitor the situation on monthly basis to ensure availability of wheat and flour in all parts of the country at a reasonable price. The ECC further decided the following.

a)         Provincial governments to be requested to announce their “Wheat Release Policy” immediately.

b)         Punjab to release 900,000 tons of wheat to flour mills of the province during next two months at a release price as proposed by the Punjab government in order to prevent surge in price of wheat/flour as proposed by Punjab.

c)         Government of Sindh should also be requested to announce their policy.

d)         PASSCO to assess the immediate requirement of Khyber Pakhtunkhwa and Balochistan and arrange to improve supply wheat as per agreed targets.

e)         Movement of wheat to be facilitated between Punjab and KP/Balochistan.

f)          Overall free movement of wheat should be ensured across the border and to ensure movement across districts and provinces.

g)         Private wheat importers may be facilitated and arrangements between importers and KP/Balochistan should also be arranged and calculate the impact of subsidy for the import, if any.

h)         Import of wheat by private sector be allowed and the situation be watched on monthly basis. The financial implications of import/non-imports by private sector should also be assessed.

i)          If there is no import by Private sector, then the Government should import wheat itself.

j)          Monitoring and supply provisions be improved to ensure availability of wheat is available at shortage points and other market imperfections unconnected to supply and demand of wheat/flour should also be looked at.

k)         Focus on inter-relation between wheat and Atta and try to increase conversion rate from wheat to Atta.

l)          Check the cross-border movement of Atta to ensure that Atta doesn’t flow out to Afghanistan and points of exit.

m)        Develop a group for longer term strategy for the whole year and also for medium term.

The ECC also considered and approved five proposals by the Interior Division for technical supplementary grants, including one technical supplementary grant (TSG) of Rs 2.5 billion to clear accrued verified liabilities of Punjab Mass-transit Authority (PMA) as federal share on account of operation of Pakistan Metro-bus System; two separate TSGs of Rs 200 million and Rs 36.400 million for ICT Police to clear outstanding liabilities of Shuhada families; and two separate TSGs of Rs. 105.621 million and Rs.60.581 million for ICT Police to clear outstanding liabilities during CFY 2019-20.

The ECC also approved a proposal by the Finance Division for TSG of Rs 1300 million to meet critical demands related to medical stores and utilities for the Pakistan Navy. On another proposal by the Defence Division, the ECC allowed the CDA to collect charges against allotment of 45 acres land in Jagiot Farm Islamabad to Directororate General of ISI as per Rs 2250 per square yard rate with the total implication of Rs 490.05 million as already approved by the Prime Minister in May 2018. The ECC also approved a TSG amounting to Rs 490.05 for the purpose.

On a proposal by the Industries and Production division, the ECC approved a package combining reduced duties and taxes for a period of three months to ensure uninterrupted supply of oxygen gas and oxygen cylinders in the country for medical purposes.  The ECC also directed the Ministry of National Health Services Regulations and Coordination and Ministry of Interior to clear all the outstanding dues payable to oxygen manufacturing companies as per the legal provisions of contracts. The ECC directed the concerned ministries and departments to ensure supply of oxygen for medical purposes by actively engaging with the oxygen plants and with hospitals for keeping the oxygen charges at the minimum level.

The ECC also considered and approval a proposal by the Finance Division for a new lending policy to the provincial governments for their Ways and Means requirements and for signing of agreements by Finance Division and the State Bank of Pakistan to implement the new lending policy. Under the new policy, the existing Ways and Means limit for Punjab has been changed from Rs 37 billion to Rs 77 billion, from Rs 15 billion to Rs 39 billion for Sindh, from Rs 10.1 billion to Rs 27 billion for Khyber Pakhtunkhwa and from Rs 7.1 billion to Rs 17 billion for Balochistan.

The National Price Monitoring Committee (NPMC) meeting was held under the Chairmanship of Finance Secretary to discuss the price trend  of essential food items. The meeting was attended by the representatives from the provincial governments, Islamabad Capital Territory, Ministries of Industries, Interior,  Planning, Development & Special Initiatives, National Food Security & Research, Federal Board of Revenue, Competition Commission of Pakistan and Pakistan Bureau of Statistics.

The meeting was informed that CPI inflation year on year is recorded at 8.2 % in May 2020 over May 2019 and July-May CPI inflation on average reached to 10.9%. It was noted that inflation is on continuously declining trend since January 2020, due to policy, administrative and relief measures of the Federal and provincial governments. It was also observed that price trend in international market is on declining trend which will augur well for the domestic prices in near future. Government is proactively taking measures to control the general price level of daily use items at Federal, provincial and district levels.

It has been noticed that Sensitive Price Indicator (SPI) which monitors the price movement of 51 essential items on weekly basis recorded an increase of 0.05% for the week ended on 11th June, 2020.  During the week, 10 items recorded decline in their prices while 22 items remain stable. The last week ended on 04th June 2020 recorded a decline of 0.42 percent.

The Chair informed that the recent Cabinet meeting took notice of the price hike in poultry sector. The Chair discussed the matter in details with all stakeholders and examined the demand and supply dynamics of poultry products and directed provincial governments and ICT administration to take strict actions where undue price hike is being made and urged to take comprehensive measures  for smooth supply of poultry products.

The provincial representative and ICT administration ensured that they will take all possible measures to improve the situation and the prices will tame down in coming days.

The Chair also directed the CCP to share their findings in poultry sector with provincial government and ICT to streamline the recent spike in the prices of poultry sector and play proactive role to control the spike in prices.

NPMC also directed the Ministry of National Food Security to make necessary coordination and consultation with provincial governments in a more vigilant way on the prices of wheat & wheat flour and take immediate measures to ensure smooth supply.

The Chair advised that all relevant authorities along with provincial governments should monitor the provision of essential food items at affordable prices and remove the price disparity and keep an eye on undue profit margin as in some cases higher profit margin was also observed. The provincial governments and ICT administration ensured that they will take strict measures to minimize undue profit margin.

Secretary Finance Naveed Kamran Baloch stated that a timely action and coordinated efforts by the Government of Pakistan and the country’s banks helped restrict the adverse impacts of COVID-19 on flow of remittances to Pakistan as remittances to Pakistan declined by 4.3% (year- on – year) during March – May 2020 compared with World Bank’s forecast of 23% for 2020.

“The decline in case of Bangladesh is 16.7% during March – May 2020 the only comparable regional data available,” he said while addressing a Webinar arranged by DFID-UKAid to mark the Call to Action and the International Day of Family Remittances Action.

Mr. Naveed Kamran Baloch informed the participants that the initial assessment in Pakistan suggested a sharp decline in remittances from April 2020 onwards due to COVID-19 pandemic. However, the government adopted timely measures to mitigate these adverse impacts by asking the banks to conduct aggressive awareness campaigns to inform the senders and recipient of remittances about available digital/online channels for sending and receiving remittances. The banks were also asked to conduct similar campaigns with their overseas correspondents and further advised to ensure availability of cash in remittance rich areas to cater to the needs of recipient of cash remittances.

The Secretary explained that government instructed the banks to rationalize’ compliance checks with respect to both recipient and sender to ensure swift delivery of remittances. The banks were also requested to promote remittances through different marketing activities and incentive schemes (through gifts and lucky draws etc); and enhance their limit for cash over counter. The central bank’s team of experts on AML/CFT communicated the message and explained true spirit of AML/CFT regime to banks.

The Secretary said that in response to the measures suggested by the government, the banks augmented their efforts through this period by enhancing their marketing efforts through a record number of TV commercials of individual banks and a joint TV commercial by 6 large banks aired on domestic TV Channels and their international transmissions during May/June 2020 with particular focus on awareness regarding digital channels for sending and receiving payments.

Mr. Naveed Kamran Baloch was of the opinion that an active support of the Government of Pakistan to promote remittances proved a shock absorber during COVID-19. He said the Government of Pakistan also amended two of the schemes to accommodate small remitters through expanding the scope of free send model and broadening the scope of marketing incentive scheme.

It is notable that Bangladesh authorities also modified their 2% additional cash incentive scheme to encourage remittances through formal channels. The threshold of remittance transaction without documentary evidence has been increased from USD 1500 to USD 5000.

The Secretary noted that it was not surprising that COVID-19 has been reshaping all the businesses particularly financial services. Our data suggests that banks with automated processing systems, mobile wallets and direct account credit facility with large global money transfer operators, registered strong positive growths in remittances as against declines in remittance by banks without these products and automated processes.

He informed the meeting that Pakistan has witnessed direct or first-round impact of COVID-19 on flow of remittances so far. The indirect or second round effects of COVID due to significant slowdown in economic activities and oil prices in low trajectory were yet to hit labor markets, particularly in GCC. He said it was the right time for the banks to promote digital channels and direct account credit remittance products among remittance customers. He also suggested that the remittance recipient countries should focus on preparing comprehensive plans for reintegration of expected returning migrant workers in their mainstream economic activities.

It may be noted that Pakistani Diaspora can send remittances to Pakistan under free send model and Government of Pakistan reimburses the cost of remittances to financial institutions under Reimbursement of TT Charges Scheme. Government of Pakistan pays the remittance transaction cost @ Saudi Riyal 20 to domestic banks for transaction above USD 200. However, this amount was SR 10 for transaction between USD 100 to USD 200. Some overseas correspondents were not catering small remitters due to less incentive. Therefore, effective from April 15, 2020; the rebate amount for transactions between USD 100 to USD 200 has also been increased from Saudi Riyal 10/- to Saudi Riyal 20/- to support small remitters.

A high-level meeting was held at the Finance Division today (Tuesday) with Adviser to the Prime Minister on Finance & Revenue Dr. Abdul Hafeez Shaikh in the chair to review the wheat and flour situation in the country and the causes for recent increase in wheat and flour prices, especially in Khyber Pakhtoonkhwa and Balochistan.

Minister for Science and Technology Mr. Fawad Chaudhry, Adviser to Prime Minister on Institutional Reforms and Austerity Dr Ishrat Hussain, Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood, Punjab Senior Food Minister Abdul Aleem Khan, Secretary Finance, Secretary National Food Security and Research, Secretary Industries & Production and Chief Secretary Punjab attended the meeting in person while the chief secretaries of Sindh, Khyber Pakhtoonkhwa and Balochistan attended the meeting on Zoom.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of the Economic Coordination Committee of the Cabinet today at the Cabinet Division.

ECC approved the following technical supplementary grants:

1) Rs.3.2 billion for PIACL( Pakistan International Airline corporation Limited) to discharge the obligations on account of markup against GoP guaranteed loans.
2) Rs25,206,953 in favor of Pakistan Academy for Rural Development (PARD) Peshawar for the current financial year.
3) Rs. 1300 million to Pakistan Atomic Energy Commission to discharge its various liabilities
4) Rs 235 million to Deputy Commissioner Islamabad for making payment of internal security duty allowance to troops of Pakistan Rangers (Punjab) deployed in Islamabad
5) Rs 500 million to the Ministry of Information and Broadcasting to meet the expenditure of media campaign on Covid-19
6) Rs 100 million for National Disaster Management Authority (NDMF) for procuring equipment for locust control in Punjab
7) Rs 7.947 billion to NDMA on account of procurement of emergency equipment through Pakistan Foreign Mission in China (Ex-post Facto approval on account of Pakistan National Emergency Preparedness and Response for Covid-19, procurement of equipment and transfer of funds)
8) Rs.4.5 billion for the capacity building of Civil Armed forces as requested by the Ministry of Interior
9) Rs.80 million for Competition Commission of Pakistan for different expenses
10) Rs 100 million for the purchase of kerosene oil by Head Quarters Frontier Corps KP (North) to be used in different locations posts (8000 feet and above)
11) Rs.8.093 million for the Privatization Division for employee related expenditure
12) Two TSGs amounting to Rs 1192.325 million and Rs 358.506 million for Ministry of Federal Education and Professional Training for the Award of Scholarships to Afghan students
ECC also granted approval for book value adjustment of overdue amount of loans amounting to Rs 30.807 billion to Earth Quake Reconstruction and Rehabilitation Authority over and above its allocated development and non-development budget. It also allowed, on the recommendation of the committee earlier constituted by ECC, to convert two relent Chinese loans in to Government loans keeping in view the subsuming of ERRA into NDMA and ERRA being non-profit/ non revenue generating entity.

ECC also approved the “handing over of Pakistan Machine Tool Factory to Strategic Plans Division. For the purpose of operationalization of PMTF, Rs 500 million shall be provided to SPD as a loan. The Federal Government shall pay all the liabilities accrued till the transfer of management control of PMTF to SPD, after partial settlement of liabilities of Rs 1.78 billion

ECC also approved the “Risk Sharing Facility for SBP Refinance Scheme to support employment and prevent layoff of workers. The scheme supports provision of credit at concessional rate to businesses that commit not to lay off workers till September 2020 ( earlier the cutoff date was 30th June 2020), the loss coverage for SME sector has been increased to 60% from the existing 40% to promote greater take up at the smaller level of business. Under the new changes the borrowers having turnover up to Rs 800 million can avail benefit of the scheme; earlier, for the eligibility of  the scheme, the turnover limit was up to Rs 2 billion).

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of the Economic Coordination Committee of the Cabinet today at the Cabinet Division.

ECC approved the following technical supplementary grants:

1) Rs.3.2 billion for PIACL( Pakistan International Airline corporation Limited) to discharge the obligations on account of markup against GoP guaranteed loans.
2) Rs25,206,953 in favor of Pakistan Academy for Rural Development (PARD) Peshawar for the current financial year.
3) Rs. 1300 million to Pakistan Atomic Energy Commission to discharge its various liabilities
4) Rs 235 million to Deputy Commissioner Islamabad for making payment of internal security duty allowance to troops of Pakistan Rangers (Punjab) deployed in Islamabad
5) Rs 500 million to the Ministry of Information and Broadcasting to meet the expenditure of media campaign on Covid-19
6) Rs 100 million for National Disaster Management Authority (NDMF) for procuring equipment for locust control in Punjab
7) Rs 7.947 billion to NDMA on account of procurement of emergency equipment through Pakistan Foreign Mission in China (Ex-post Facto approval on account of Pakistan National Emergency Preparedness and Response for Covid-19, procurement of equipment and transfer of funds)
8) Rs.4.5 billion for the capacity building of Civil Armed forces as requested by the Ministry of Interior
9) Rs.80 million for Competition Commission of Pakistan for different expenses
10) Rs 100 million for the purchase of kerosene oil by Head Quarters Frontier Corps KP (North) to be used in different locations posts (8000 feet and above)
11) Rs.8.093 million for the Privatization Division for employee related expenditure
12) Two TSGs amounting to Rs 1192.325 million and Rs 358.506 million for Ministry of Federal Education and Professional Training for the Award of Scholarships to Afghan students
ECC also granted approval for book value adjustment of overdue amount of loans amounting to Rs 30.807 billion to Earth Quake Reconstruction and Rehabilitation Authority over and above its allocated development and non-development budget. It also allowed, on the recommendation of the committee earlier constituted by ECC, to convert two relent Chinese loans in to Government loans keeping in view the subsuming of ERRA into NDMA and ERRA being non-profit/ non revenue generating entity.

ECC also approved the “handing over of Pakistan Machine Tool Factory to Strategic Plans Division. For the purpose of operationalization of PMTF, Rs 500 million shall be provided to SPD as a loan. The Federal Government shall pay all the liabilities accrued till the transfer of management control of PMTF to SPD, after partial settlement of liabilities of Rs 1.78 billion

ECC also approved the “Risk Sharing Facility for SBP Refinance Scheme to support employment and prevent layoff of workers. The scheme supports provision of credit at concessional rate to businesses that commit not to lay off workers till September 2020 ( earlier the cutoff date was 30th June 2020), the loss coverage for SME sector has been increased to 60% from the existing 40% to promote greater take up at the smaller level of business. Under the new changes the borrowers having turnover up to Rs 800 million can avail benefit of the scheme; earlier, for the eligibility of  the scheme, the turnover limit was up to Rs 2 billion).

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet at the PM Office today. The following technical supplementary grants were approved by ECC:

i. Rs. 3485 million for Ministry of Foreign Affairs for meeting the costs of the running of the foreign missions.
ii. Rs. 54,71,707 for Ministry of Law & Justice to pay the annual membership fee of different organizations.
iii. Rs. 250 million to NAB to meet its liabilities towards government of Punjab.
iv. Rs. 168,151,919 to Ministry of Interior for smooth working of the peacekeeping missions.
v. Rs. 18.33 million for the privatization commission to meet its expenditure under various heads.
vi. Rs. 7,248.050 for Ministry of National Health services, Regulations & coordination for expanded program on immunization.
vii. Rs. 79 million was given to Pakistan Institute of Medical Sciences (PIMS) to meets its various expenditures.
viii. Rs. 5 billion for the Pakistan Poverty Alleviation Fund
ix. Rs 8.4 billion to BISP ( the amount was transferred by Govt. of Punjab for onward transfer to BISP beneficiaries in Punjab through Ehsaas program)
x. Rs. 500 million for the ICT Administration for completing two projects
xi. Rs 450 million to ICT Administration for Sustainable Development Goals Achievement Program
xii. Rs 3369.62 million for Establishment Division to pay arrears of group Insurance of non-gazetted employees

In order to pay the risk allowance, equal to one pay to all health care workers performing duties related to COVID-19 in the Federal Government, decided by the Prime Minister as Chairman National Coordination Committee on COVID-19, in the meeting held on 26th March 2020, ECC approved an amount of Rs.480.556 million (financial impact from 1st April 2020 to 30th July 2020) to meet the requirement. The amount shall be provided out of Rs 50 billion of the Prime Minister’s Fiscal stimulus Package through technical supplementary grant. The amount shall be paid to 3432 employees of 10 health institutions of the Federal Government. The situation will be reviewed after 4 months for the continuity of the allowance.

ECC after reviewing the situation of Urea availability in the country and for making available for the upcoming sowing season, a committee was formed under the chairmanship of the Minister for Industries with representatives from National Food Security, Petroleum and Finance Division to review and recommend the appropriate Variable Contribution Margin.

On the earlier instructions of the ECC for the presentation of a report on wheat procurement by Provinces and PASSCO, ECC was briefed that so far PASSCO and Provincial Food Departments have procured a quantity of 6.5 million tons or 80% out of the assigned target of 8.25 million tons. PASSCO and KP government shall continue procurement till end June 2020. On the recommendation of the Ministry of National Food Security and Research, ECC directed that Provincial Food Departments of KP and Balochistan to achieve their procurement targets as early as possible and Law Enforcement Agencies of the provinces to be sensitive against hoarding and keeping a vigilant check on price hike of flour and wheat.

In order to provide relief to small and medium enterprises during the ongoing pandemic situation, ECC approved the change in key terms of the Kamyab Jawan Program. Now instead of two tiers (100,000 to 0.5 mill and 0.5 million to 5 million) there will be three tiers of the loans; Rs. 100,000 to 1 million, Rs 1 million to 10 million, Rs 10 million to 25 million. Tier 1 loans shall be on the personal guarantee of the borrower whereas T2 and T3 loans shall be as per bank’s own credit policy. Government shall bear credit losses for principal portion only on the disbursed portfolios of the banks for T1 up to 50%. T2 up to20%, T3 up to 10% and the executing agencies shall be all commercial banks. Loan pricing was also changed for all three tiers (3%,4%, 5% respectively, bank pricing shall be KIBOR+400 BPS for all three tiers).

ECC also approved US$ 10.9 million for capital increase in Bangladesh operations of National Bank of Pakistan and for meeting the minimum capital requirements prescribed by the Central Bank of Bangladesh for the year 2019 and to create some cushion in equity for 2020. The proposal was submitted by Finance Division.

Electric Vehicle policy for 2-3 wheelers and Heavy Commercial Vehicles gets approval of the ECC. The policy was proposed by Ministry of Industries after consultation with various stakeholders from Engineering Development Board, Ministry of Science and Technology, Ministry of Climate Change, Ministry of science and Technology and others.

ECC also approved supply of 10,000 MT of wheat to World Food Program for Emergency Relief Operations and allowed import of wheat by the private sector for unlimited period after waiving different taxes and duties. ECC also directed to remove restrictions on the movement of wheat/ flour within the country and banned exports till next recommendations.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh has assured that Rs 50 billion agriculture package announced by the government recently would be targeted and every attempt would be made to ensure its beneficiaries were the farmers and crop growers for whom this relief package was intended.

The government has approved this package with a view to extending relief to the farmers community and its direct disbursement to the farmers and crop growers remains a key objective of the government, he said while chairing a meeting with a delegation of the Farmers Associates Pakistan (FAP) that met the Adviser and members of the government’s economic team at the Finance Division today.

Adviser to the Prime Minister on Commerce and Investment Abdul Razak Dawood, Minister for Industries and Production Muhammad Hammad Azhar, Chairman FAP & Foreign Minister of Pakistan Makhdoom Shah Mehmood Qureshi, Vice Chairman FAP & Punjab Minister for Management and Professional Development Makhdoom Hussain Jahania Gardezi, Managing Director FAP Malik Afaq Tiwana & Director FAP Mr. Afzaal Haider Rizvi were also present along with Secretary Finance Division Mr. Naveed Kamran Baloch and Chairperson FBR Ms Nausheen Javaid Amjad.

Dr. Abdul Hafeez Shaikh welcomed various proposals and recommendations put forward by the delegation regarding extending direct relief to the farmers, including possible reduction of electricity tariff for tube-wells, reduction of import duty on fertilizers, reduction of mark-up and waiver of agricultural loans, deregulation of the import and export of agriculture products and livestock.

He said the government was open to considering any suggestion to further improve the disbursement criterion of the agriculture package of Rs 50 billion in view of the input and consultation of the stakeholders. Similarly, the government was also willing to extend further relief to the farmers as and when required and proposed by the Ministry of National Food Security & Research for the growth of agriculture and betterment of farmers.

The Adviser conceded that the agriculture sector had the potential in a post-COVID scenario to generate employment, boost growth, alleviate poverty and enhance food security. He asked the leadership of FAP and the concerned ministries to sit together in the coming days to further fine-tune and improve the disbursement mechanism of the agriculture package and put bring up any other suggestions or recommendations to further support the farming community and boost the agriculture sector.

Adviser to the Prime Minister on Finance & Revenue, Dr. Abdul Hafeez Shaikh, chaired a meeting here at the Finance Division with Mr. Siraj Kassaim Teli, Chairman Businessmen community and representatives of Karachi Chambers of Commerce and Industry to discuss budget proposals from business community of Karachi.

The group requested the Adviser to look into the possibility of reducing the taxes and speeding up of income tax refunds for the businessmen. They asked the Adviser to take concrete measures to facilitate the business community for facilitating their business activities.

The Adviser assured the representatives that the government is giving proper consideration to their proposals in the upcoming budget and will continue to cooperate with the business community to boost the businesses and generate employment and economic development in the country.

Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh and his team at the Finance Division held a zoom meeting with the office bearers and members of the Pakistan Textile Council (PTC) here at the Finance Division today.

During the meeting that was also attended by Minister for Industries and Production Mr. Hammad Azhar, Adviser to the Prime Minister on Commerce and Investment Mr. Abdul Razak Dawood, Chairperson FBR Ms Nausheen Javaid Amjad and senior officials of the Revenue and Finance Division, the representatives of the Pakistan Textile Council highlighted their issues in the wake of COVID-19 and presented some very useful proposals for consideration in the upcoming budget.

Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh assured the PTC members that their proposals would be considered while finalizing the budget so as to provide maximum possible relief to the businesses.

Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh has asked the international development partners and the government agencies to continue evaluating the losses suffered by the Pakistan economy due to COVID-19 to help the government come up with a swift and robust policy response.

The adviser was chairing a meeting held here to evaluate the economic losses suffered by the Pakistan economy due to COVID-19. The meeting was also attended by Minister for Industries and Production Mr. Hammad Azhar, Adviser to the Prime Minister on Commerce and Investment Mr. Abdul Razak Dawood and senior officials of the Finance Division.

The Adviser appreciated what he called an excellent work done by the Planning Commission, the State Bank of Pakistan and the development partners in assessing and evaluating the losses suffered by the Pakistan economy in the wake of COVID-19. He said that the government had announced its Rs 1.2 trillion stimulus package not only to help the businesses but also the poorest segments of our population in alleviating their miseries and suffering.

Earlier, Governor State Bank of Pakistan Mr. Reza Baqir who attended the meeting on Zoom, presented a detailed analysis of the State Bank of Pakistan as well as its policy response to the economic impact of COVID-19.

Mr. Xiaohong Yang, Country Director for Asian Development Bank in Pakistan, also gave a detailed presentation on the economic losses suffered by countries in Asia in general and by Pakistan in particular in the wake of Coronavirus. The data presented by ADB also showed promising signs of recovery in Pakistan economy in the post-COVID 19 scenario.

During the meeting, Julien Harneis, United Nations Resident Coordinator Humanitarian Coordinator in Pakistan, and Mr. Patchamuthu Illangovan, Country Director of the World Bank in Pakistan, also provided similar data.

Mr. Asif Saeed, Member Planning Commission, also presented a detailed report prepared on the instruction of the Government on the economic losses suffered by the economy due to COVID-19.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh has said that the government is aiming to improve the business environment in the country by providing ease of doing business and facilitating businesses by providing them with a level playing field.

He said the government was aware of the difficulties faced by various businesses and different sectors of the economy due to the impact of COVID-19 on national economy and all possible measures, including the announcement of Rs 1200 billion stimulus package, were being adopted to provide the businesses a road to recovery and a healthy work environment with full support from the government in the form of low taxes and more incentives for growth.

He made these comments while holding separate zoom meetings with the office bearers and members of various organisations and business groups, including the Pakistan Cotton Ginners’ Association, All Pakistan Textile Mills Association (APTMA) and representatives of Independent Power Producers (IPPs) as well as the country’s beverage industry. Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood, Chairperson FBR Ms. Nausheen Javaid Amjad and senior officials of the Finance Division and FBR were also present.

During the meetings, various problems and difficulties faced by the relevant sectors were highlighted by their representatives and different proposals and recommendations, including possible reduction or removal of taxes and duties and payment of outstanding tax refunds to provide sufficient liquidity to the businesses, were discussed.

Dr. Abdul Hafeez Shaikh assured the participants of the meetings his full support in resolution of their realistic problems and asked the FBR leadership to engage with the bodies and organisations to expedite payment of tax refunds and resolve other issues as highlighted by the participants of the meetings.

The Economic Coordination Committee (ECC) of the Cabinet has set up a body headed by Special Assistant to Prime Minister for Petroleum Mr. Nadeem Babar to explore various call options for hedging prices for the petroleum products imported by Pakistan.

The ECC meeting chaired by Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh also gave go-ahead to a “full and final” human resource rationalisation plan for the Pakistan Steel Mills employees in accordance with the judgements and observations of the Supreme Court of Pakistan and other courts hearing the cases involving the PSM.

The ECC took up the proposal prepared by the Ministry of Energy in consultation with various international institutions and local partners for hedging prices for petroleum products being imported and decided to set up a Committee headed by Special Assistant to Prime Minister for Petroleum Mr. Nadeem Babar and including representation from SBP, PSO, Finance Division, Petroleum Division, Law Division and Planning Division to explore call option for 15 million barrels of oil for one or two years divided in 12 equal monthly amounts for different stock price above current Brent as long as fee is within acceptable range. Under the TOR which can be readjusted by the Committee in the light of future developments, PSO will act as the counterparty while the Ministry of Finance shall give a guarantee of performance by the PSO. OGRA would also be given the policy direction to include the monthly price of the Option in the cost of LNG or any other oil product chosen in announcing the monthly prices.

The ECC also discussed the reported shortage of petrol in some cities and asked the Ministry of Energy, Competition Commission of Pakistan and the OGRA to ensure the requisite stocks were maintained by the OMCs and the supply to the fuel stations across the country was regular and intact throughout the month. Chairman ECC while taking a stern view of the reported petrol shortage directed all the relevant Government Ministries /Departments to immediately inform him if situation worsens any further.

On another proposal by the Ministry of Energy, the ECC considered and approved reimbursement of operational cost of Single Point mooring (SPM) installed by M/s Byco. Under the decision BYCO would submit actual audited operating cost of the SPM (excluding Wharfage/FOTCO charges/crude saving) to OGRA for inclusion in IFEM subject to a cap of PARCO rate while OGRA shall determine the actual impact for inclusion in the IFEM on the ongoing basis. Consequently with the implementation of the above decision, BYCO will withdraw its case from the Supreme Court of Pakistan and would also provide an undertaking that the ECC decision conclusively closes the pending matter of SPM’s costs.

On another proposal by the Ministry of Energy, the ECC asked the Finance Division to release an amount of Rs 1 billion to meet the cost over and above the criteria for supply of gas to villages and localities falling within 5 kilometres radius of gas producing fields as per instructions of the Supreme Court of Pakistan to implement an announcement of the Prime Minister made in September 2003 for supply of gas to villages and localities falling within 5 kilometres radius of gas producing fields.

The ECC also took up a proposal by the Ministry of Energy for payment of unrecovered fixed costs of Rs.43.7 billion to the IPPs and asked the Finance Division to release Rs 23 billion while the issue of remaining payments would be resolved by all the stakeholders within one week and would be taken up in the next ECC meeting.

During the meeting, the ECC also took up and approved 12 separate proposals for technical supplementary grants of various amounts from different divisions and departments, including Interior Division, NAB, Revenue Division, Cabinet Division, National Heritage and Culture Division, Finance Division, Federal Education and Professional Training, Communications Division and Religious Affairs and Interfaith Harmony Division.

In order to provide further relief to the consumers, the following petroleum prices have been approved by the Government.
Product Existing Price per litre (Rs) New Price per litre (Rs):

Despite the global trend of increasing prices of the petroleum products, the government has decided to extend further relief in petroleum prices to the public.
These prices shall be applicable from 1st of June.2020.

Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh chaired the meeting of the Economic Coordination Committee of the Cabinet here at the Cabinet Division.

ECC discussed in detail and approved the Criteria for Disbursement of Rs.200 billion in power sector received through Islamic Sukuk . According to the decision made by the forum energy purchase price inclusive of GST will be paid to ensure maximum generation is available during next 3 summer months(June, July and August 2020) according to the generation plan of next three months. Capacity payments will be disbursed to meet the debt servicing and taxation requirements for the period from June to end August 2020 and Payments to WAPDA, Nuclear Power Plants and partial settlement of import of power from Iran and NTDC transmission charges will be disbursed separately for operational requirements for public sector plants and entities, as WAPDA and Nuclear power plants comprise of more than 30% of the total planned generation in the next three months. However, this disbursement criteria will be followed for funds released under Rs.200 bn only. ECC directed Ministry of Energy to submit a proposal in next two weeks setting up the general principles and exact formula of payments based on the principles for the future payments. The Chair also directed the Ministry of Energy to minimize discretion in the principles/ formula so that the funds may reach the maximum possible number of receivers and reduce the built up of liabilities towards the government. It was also directed that as soon as the payments are made the information should also be made public through the official website of the Ministry for the information of the general public.

On the proposal of the Ministry of Industries and Production, ECC approved the release of Rs 525.858 million in favor of government of AJK for disbursement amongst the eligible commercial and industrial consumers of electricity under the PM’s SME Relief Package and similarly Rs. 136.299 millon to be provided to the government of Gilgit Baltistan for disbursement amongst the eligible commercial and industrial consumers of electricity. Total subsidy under the SME relief package for AJK and GB comes to 662.157 million rupees.

A delegation of Nishat Group met Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh to apprise him of the damage done by Covid related economic downturn to large-scale manufacturers.

Advisor Commerce and Minister Industries were also present in the meeting apart from Dr. Ishrat Husain, Finance Secretary and Chairperson FBR who also participated in the meeting.

It was shared by the delegation that owing to Covid induced demand compression, size of balance sheets of large manufacturers is not maintainable. The major contributory factor is massive labour cost specially in labor intensive industries like garments sector. Any arrangements of avoiding permanent laying off or furloughs are putting excessive strains on the liquidity position of businesses, which are anticipating slow economic recovery, hence hedging against potential solvency issues.

The delegation head stressed on enhanced role by the Government to ease liquidity position of large businesses. The need for crafting scheme for cost sharing between public and private sectors was stressed.

The Adviser Finance empathized with the participants and updated them about the current status of implementation of PM stimulus package worth Rs 1240 billion. The delegation was asked to put up precise case for financial facilitation and its parameters as SBP has already been running a scheme for payroll protection.

The Advisor to the Prime Minister on Commerce desired for working out impact of reversion of orders by US, from China to other countries, and its potential impact for manufacturers in Pakistan.

The Minister Industries requested the delegation to provide details of proposal in terms of cost sharing arrangements along with details about requirements of different sectors so that Government could ensure balanced treatment to all key contributors to GDP.

The Adviser Finance concluded the meeting with the understanding that specific proposal be crafted regarding upscaling of existing scheme of SBP as too many interventions carry the risk of diluting the impact. He further emphasized that upper bounds of additional liability be calculated through defined parameters so that evidence-based decision may be shaped before next budget.

A special meeting of the PM-formed Think Tank was held here during the Eid holidays with Adviser to the Prime Minister on Finance & Revenue Dr Abdul Hafeez Shaikh in the chair.

All other members of the high-level group also participated in the meeting while Governor State Bank of Pakistan joined the proceedings on special invitation

During the meeting, the work done by Finance & Banking Committee remained under primary focus apart from the feedback from Committee on Social Safety Nets. Sultan Ali Allana presented the joint work of committee on Banks and Financial Institutions to improve liquidity and credit for individuals and businesses. The emphasis remained on Digital Account Offering for overseas Pakistanis, with reference to its objectives, key processes, product features as well as key regulatory and administrative challenges.

Mr. Shoukat Tarin and Mr. Sultan Ali Allana jointly shared other proposals too, including suggestions on enhancement of temporary relief facilities, expanding lending to SMEs and enabling demand growth through expanding consumer lending and encouraging housing finance.

Advisor Commerce and Dr. Ishrat Husain sensitized about the need for due diligence with reference to potentially adverse effects of the new scheme on existing remittances/ products, FATF concerns and harmonization of all initiatives aimed at promotion of digital economy. The experience of Pakistan Banao Certificate needs to be kept as benchmark to plug potential loopholes while offering new product.
Advisor Finance stressed on the need for demand trials in pursuit of developing target market. The proposal by Arif Habib for reduction of NADRA fees in data verification process got particular endorsement from other members ,as this wholly public-owned entity should not keep profit as primary motive in its operations.

Governor, SBP appreciated various recommendations of the Committee on improving liquidity for individuals and businesses and shared that SBP, in collaboration with MOF and CDNS has been in final phase of launching a saving product for overseas Pakistanis, in partnership with banks and CDNS, where lot of back-end work has already been sorted out.

Dr. Ishrat Husain and other participants raised concerns about the level of automation and digitization within CDNS and stressed for the need of combining of SBP’s and Committee’s proposals to offer more robust and legally compliant solution.

Shoukat Tarin briefed that multiple consultative sessions of Committee have been held with Naya Pakistan Housing Authority and other stakeholders, on shaping recommendations for boosting investments in housing sector and promotion of multiple financing options . It was further informed that committee report was ready for sharing with the group members to attract constructive feedback.

Dr.Ijaz Nabi shared the committee’s assessment on Ehsas program, with reference to key areas of concerns and briefed the participants about various recommendations shaped so far. Participants felt the need for engaging Dr. Sani Nishtar in the next meeting to have better understanding on moving forward. Provincial coordination issues were also highlighted which need to be resolved for smooth implementation of matters like tax harmonization.

Advisor to PM on Finance & Revenue shared holistic capture of all the main arguments presented in the meeting. He advised Finance Secretary to organize meeting of SBP with Shoukat Tarin, Sultan Ali Allana and Arif Habib , to have understanding of bilateral point of view on the features, processes and allied aspects of Digital Account Scheme, with a view to evolve consensus on unified practical approach. Moreover, other proposals of Committee also need to be deliberated with SBP in the same meeting to have clarity about way forward.

It was decided that members of Think Tank Group would share feedback on proposals of various committees to synthesize unified approach. Committee on Housing initiatives was requested to share its report for advance feedback whereas Chairman, Naya Pakistan Housing Authority and Dr. Sania would also be invited in next session to evolve consensus on respective domains.

It was unanimously agreed that Think Tank forum would meet again shortly owing to the urgency for finalization of work. Advisor Finance shared that recommendations of Think Tank would also be presented before PM soon, so that final directions from top forum are incorporated into budgetary process including budget speech.

The Economic Coordination Committee (ECC) of the Cabinet has approved Mobile Device Manufacturing Policy to promote local manufacturing and assembly of mobile phone handsets.

The policy approved in a meeting of the ECC chaired by Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh is aimed at ensuring localisation and indigenization of the parts of the mobile phones.

Earlier, the ECC was told that under the Mobile Device Manufacturing Policy, parts of mobile phone handsets will be used for the entire range of mobile phone handsets produced in Pakistan instead of limited to a particular model. The policy will have a positive impact on allied industry including packaging and plasting. The expected arrival of high end brands will give local industry an opportunity to become part of the global value chain. In addition, setting up of R&D centres and an ecosystem for software application is also visualised under the policy.

The ECC discussed various recommendations proposed as part of the policy and approved the following:

1. Removal of Regulatory Duty for CKD/SKD manufacturing by PTA approved manufactures under input/output Co-Efficient Organization (IOCO) approved import authorization.
2. Removal of Fixed Income Tax on CKD/SKD manufacturing of mobile devices up to USD 350 category.
   
3. Increase in Fixed Income Tax on USD 351-500 USD category by Rs 2000 and>USD 500 by Rs.6300 on CKD/SKD manufacturing only.
   
4. Removal of Fixed Sales Tax on CKD/SKD manufacturing of mobile devices.
   
5. PTA shall allow activation of handsets manufacturing in the country under import authorization of inputs by IOCO in CKS/SKD kit (8517.1211) and not under HS Code 8517.7000 i.e. parts. This will eliminate misdeclaration in parts category at the import stage. Activation of CBUs imported through notified routes after payment of all levied duties and taxes as fixed by government from time to time shall continue till further amendment.
   
6. In up to USD 30 category, words “except smart phones” to be inserted for CBU imports under 8517.1219 to avoid misdeclaration.
   
7. R&D allowance of 3% to be given to local manufactures for exports of mobile phones.
   
8. Locally assembled / manufactured phones to be exempted from 4% of withholding tax on domestic sales.
   
9. Government to commit maintaining tariff differential between CBU imports and CKS/SKD manufacturing till the expiry of the policy.
   
10. Local industry to ensure localization of parts and components as per roadmap included in draft policy.
    
11. EDB to act as Secretariat of Mobile Phone Manufacturing Policy and ensure development of allied parts, components and devices.

Meanwhile, the ECC also considered a proposal brought forward by the Ministry of National Food Security and Research for an intervention price for cotton 2020-21 crop by rationalising earlier proposals after fresh consultation with the stakeholders.

The members of the ECC had an in-depth discussion on the matter and maintained that an effective and sustained support to the cotton growers was vital and necessary due to the importance of cotton for the local as well as export industry. However, such a support should be extended in the form of direct targeted subsidy to the formers. ECC further directed the Ministry of National Food Security and Research to bring up to ECC proposals, for promoting research and development and to improve seed quality and yield per acre.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh has said that Pakistan appreciates the support extended by the US in FATF, COVID-19 and debt relief from the G-20 countries.

“We value our relationship with the US particularly the business collaborations which have a great potential of growth given the opportunities for business and investment available in Pakistan,” he said while speaking during a virtual discussion with the office-bearers and members of the US-Pakistan Business Council here at the Finance Division today. Esperanza Jelalian, president of the US-Pakistan Business Council, Charles Freeman, senior vice-president Asia of US Chamber of Commerce, Steven Kobos, chairman of the US-Pakistan Business Council, Dr. Asad M. Khan, Ambassador of Pakistan to the US and other senior office-bearers and members of the US-Pakistan Business Council and US Chamber of Commerce also attended the discussion.

During the discussion, Dr. Abdul Hafeez Shaikh conveyed heartfelt sympathies from the government and the people of Pakistan on the loss of precious lives in the US due to COVID-19 pandemic. He said the Pakistani leadership had met President Trump thrice in the past and the visit by US Secretary of Commerce Wilbur Ross to Pakistan earlier this year was a confirmation of the growing trade and investment ties between the two countries. He said the business environment in Pakistan facilitated by a greater ease of doing business, improved regulations and huge market potential, was ideal for investment and joint ventures by the US businessmen.

The Adviser said the government had recently announced a Rs 1.2 trillion stimulus package that included direct cash transfers, payment of tax refunds, subsidized credits and payroll loans, to shore up the economy and boost businesses. Similarly, the upcoming budget was being designed in a way to provide maximum relief and incentives to the businesses and promote trade by reducing tariff on a large number of items of raw material.  

While speaking on the occasion, Esperanza Jelalian, president of the US-Pakistan Business Council and Steven Kobos, chairman of the US-Pakistan Business Council, said the US government and the businessmen saw Pakistan as an important trade partner and the visit by US Secretary of Commerce to Pakistan was an evidence of the degree of importance the US attached to Pakistan. The hoped the bilateral collaborations between the two countries would further grow in the coming times. 

The National Price Monitoring Committee (NPMC) has called on the authorities concerned as well as the provincial governments to coordinate their efforts to monitor the provision of essential food items at affordable prices.

The Committee also asked the Competition Commission of Pakistan to check anti-competitive practices and take prudent administrative measures to check anti-competitive practices. The Committee stressed the need for chalking out a comprehensive plan in collaboration with provinces to prevent risk of major and minor crop due to locust attack.

The observations were made during a meeting of the National Price Monitoring Committee (NPMC) held at Finance Division today under the chair of Finance Secretary to discuss the price trends of essential food items. The meeting was attended by the representatives from the provincial governments, Islamabad Capital Territory, Ministries of Industries, Interior, Planning, Development & Special Initiatives, National Food Security & Research, Federal Board of Revenue, Competition Commission of Pakistan and Pakistan Bureau of Statistics.

The meeting was informed that CPI inflation decreased by 0.8% on MoM in April 2020 over March 2020. However on YoY, recorded at 8.5 % in April 2020 over April 2019 and July-April CPI inflation on YoY reached to 11.2% (6.5% last year). Price trend in international market are on declining trend which will augur well for the domestic prices in near future. Government is proactively taking measures to control the general price level of daily use items during the month of Ramadan.

It has been noticed that Sensitive Price Indicator (SPI) which monitors the price movement of 51 essential items on weekly basis recorded an increase of 0.01% for the week ended on 14th May, 2020.  During the week, 11 items recorded decline in their prices while 26 items remain stable. This is the fifth consecutive increase in SPI during the month of April and May 2020.

Provincial governments informed that they are regularly monitoring the prices and taking strict action against hoarding and undue profiteering. Sindh Government informed that during month of Ramadan 49,833 units were checked out of which 8902 shopkeepers were fined for an amount of Rs.15.717 million.  Punjab Government informed that 460,337 inspections have been carried out and 51,924 shopkeepers were found involved in overcharging and fine of Rs.103,746,779 were imposed. The Committee also discussed the price movements of essential items among the provinces/ICT and observed variations in price level.

The meeting also discussed the outbreak of novel coronavirus and its impact on demand and supply of essential items. The spread of pandemic has compelled the governments to close/strict the boarders, however, it was informed that there is no impact of such closure on domestic prices of essential food items as their trade on these borders are negligible. 

The Chair advised that all relevant authorities along with provincial governments should in close coordination monitor the provision of essential food items at affordable prices. Competition Commission of Pakistan should also check anti-competitive practices and take prudent administrative measures to check anti-competitive practices. The Committee stressed the need of chalking out a comprehensive plan in collaboration with provinces to prevent risk of major and minor crop due to locust attack.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of the Economic Coordination Committee (ECC) of the cabinet here at the Prime Minister’s Office.
The following Technical supplementary Grants were approved by ECC

a)      Rs. 360.515 million for the repair and maintenance of Supreme Court of Pakistan Buildings in Islamabad and various cities.
b)      Rs. 3.836 billion in favor of Ministry of Housing and Works to execute development schemes in the Sindh Province
c)      Rs. 291 million in favor of Ministry of Housing and Works/ Pak. PWD for payment of salary of maintenance staff of Pak. PWD.

On the recommendations of the Committee formed under the Chairmanship of Adviser to PM on Institutional Reforms and Austerity and comprising Secretary Finance Division and Secretary Power Division to look into the issues of servicing of power sector loans and stock handling in a holistic manner, ECC allowed allocation of Rs.10 billion from Stimulus Package as a stop gap arrangement for the payment of interest on the Pakistan Energy Sukuk II for a period of six months or amendment in NEPRA Act whichever is earlier.

Subject to the approval of the Cabinet, ECC approved in principal to allow EAD to sign an MOU for availing the G-20 relief initiative. Pakistan is required to enter into this MoU with all official bilateral creditors including Paris Club creditors to implement the debt relief initiative of G-20. Chairman ECC unequivocally informed the forum that Pakistan has no intension of seeking any kind of relief for repayment of its commercial loans/ borrowings. He also informed that Pakistan has the means and will to honor its commercial commitments.

ECC also approved the proposal of the Revenue Division for declaration of multi-modal transit hub Jia Bagga NLC Transit Port as Customs Clearance port under Section 9 of the Customs Act 1969.

In order to reduce the capacity charges of power generation companies through  synthetic financing, ECC approved the ToRs for negotiations with IPPs/Gencos as recommended by a committee constituted by the CCOE vide its decision dated April 2nd 2020 under the Chairmanship of Minister for Power and comprising SAPM on Mineral Resources, Secretary Finance Division, Secretary Power and Secretary Law and Justice Division, The committee will submit its report in due course.

In order to manage and operate the Prime Minister’s COVID-19 Pandemic Relief Fund 2020, ECC approved the constitution of the Policy Committee with the following members;

1)      Prime Minister of Pakistan.( Chairman)
2)      Minister for Planning Development and Special Initiatives (member)
3)      Adviser to PM on Finance and Revenue. (member)
4)      Adviser to PM on Commerce and Investment. (member)
5)      SA PM on Poverty alleviation and social safety. (member)
6)      Prime Minister’s Focal person for Corona Philanthropy Drive. (member)
7)      Secretary Finance Division. (member)
8)      Secretary Poverty Alleviation and Social Safety. (Secretary)

Terms of reference for the proposed committee would be as under:

1)      To decide on the appropriate usage of the proceeds deposited in the fund including means of identification of the beneficiaries of the fund and the parameters of their selection.
2)      To decide about the means of disbursement of assistance to the beneficiaries
3)      To take any appropriate decisions for collection of donations, maintenance and administration of the fund and related matters.

In order to devise a comprehensive policy to incentivize “Smart phone manufacturing in Pakistan” ECC constituted a committee under the chairmanship of Federal Minister for Industries and Production and with members from Ministries of IT and Industries, Board of Investment and Engineering Development Board. The Committee shall bring its proposals after consultation with all the relevant stakeholders in due course.

ECC also assigned the role of Chairman, to Mr. Hammad Azhar, being the Federal Minister for Industries and production, of the Committee to oversee the effective utilization of subsidies, Ramazan relief package and PM’s relief Package of 50 billion by Utility Stores Corporation.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired a meeting here at the Finance Division with Mr. Atif R. Bokhari Chairman Board of Investment (BoI), to discuss measure that could facilitate the investors to bring in more investment to the country to boost up the pace of development of the country.

Chairman BoI discussed with the Adviser the investment prospects available in the country and the areas and fields where foreign investors could show interest and make investments leading to overall economic development and increase in the GDP growth rate. The problems faced by the foreign investors post COVID-19 environment were also discussed. Chairperson FBR also apprised the Adviser on the details of ongoing discussion on tax matters with the foreign investors and shared their views and expectations with regard to the upcoming budget.

The Adviser directed that the foreign investors shall be facilitated as far as possible keeping in view the prevailing environment and observing the policy guidelines.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired a meeting here at the Finance Division through video link with Dr. Ikram-ul-Haq to discuss proposals on improving the tax structure of the country with the help of effective data gathering and reconciliation mechanism. Chairman FBR, Secretary Finance and ex-secretary Finance Dr. Waqar Massoud Khan were also present during the meeting.

The Adviser appreciated the work done by Dr. Ikramul- Haq for gathering data across the country from selected markets and from different chambers of commerce and Industry. Dr. Ikram shared with the Adviser the important inferences from data gathering exercise and suggested certain techniques for data reconciliation that could improve tax collection in a more effective manner.

ECC in its meeting today at the Cabinet Division approved the Emergency Cash Assistance (Criteria and Mechanism) to the labour whose livelihoods has been affected by the COVID_19 Pandemic. The announcement was made earlier by the Prime Minister and required the formal approval of the ECC.

The meeting of the Economic Coordination Committee of the Cabinet was chaired by the Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh.

The Prime Minister on May 3rd 2020 announced that the funds collected through PM’s COVID-19 Pandemic Relief Assistance Fund 2020 will be used to assist the labour whose livelihood have been affected due to the lockdown and its impact on the economy. In his announcement the PM directed that the funds shall be disbursed through Ehsaas Emergency Cash program. The Prime Minister had also announced that for every rupee donated the government shall match 4 rupees in the fund. The budget envelop of Rs 75 billion released to BISP out of the 200 billion earmarked in PM’s relief package for distribution among labour in the country will be used for this purpose. The modalities of the disbursement are worked out by Finance Division, Poverty Alleviation Division and BISP.

BISP Board has approved that in order to identify the beneficiaries for Ehsaas Labour (Category-iv) the eligibility criteria used for Category –III of Ehsaas Emergency Cash may be used. The applications will be received only through Ehsaas Labour portal for inclusion of beneficiaries in Category-iv. Cash disbursement of Rs 12000,( one time assistance) will be made to eligible applicants through existing payment mechanism of BISP. Provinces, AJK, GB and ICT will be allocated quota in Ehsaas Labour assistance in accordance with their population share.

The Ministry of Finance has said that the rating review conducted by Moody’s Investor Service on 14th May 2020 does not downgrade Pakistan’s B3 rating.

In a statement on Friday, the Ministry has said that the Moody’s Investor Service has only placed the current rating under review for downgrade in case the G-20 Covid-19 Debt Service Suspension Initiative (G-20 DSSI) extends to private sector creditors. The action is, therefore, not Pakistan specific and is in line with Moody’s global approach to place under review for downgrade all sovereigns availing the G-20 DSSI.

The Ministry of Finance has further said that the review by the Moody’s Investor Service acknowledges that Pakistan has not indicated any interest in extending its debt service relief request to the private sector creditors and that the country’s fundamentals remain strong and on track. The review also appreciates that amid the pandemic, Pakistan’s economic, financial and institutional strength remains materially unchanged.

Advisor to the Prime Minister on Finance & Revenue Dr. Abdul Hafeez Shaikh has called for demonstration of fiscally responsible attitude as Corona led impacts are expected to deeply distort economic fabric of Pakistan.

He has also called on all the Federal Ministries and Divisions to have innovative and out of box brainstorming to achieve further cost cutting, along with efficient utilization of meagre budgetary resources.

The Adviser was addressing a meeting held at the Finance Division to discuss budgetary outlook for the next financial year. The Minister for Industries & Production and Advisor to PM on Commerce also participated in the meeting apart from core team of Finance Division. The focus of meeting was on spending priorities of the Federal Government amid corona led economic downturn and in the wake of IMF review.  

During the meeting, the Debt Wing of the Ministry of Finance shared the perspective on budget deficit projections as well as borrowing plans for foreign and domestic components of debt. T-bills and bonds dominated domestic debt borrowing has witnessed decline in cost of debt financing due to robust debt management strategy. It was apprised that choice of timing of tapping the money markets and quantum of debt raising have helped in reshaping the maturity structure of debt portfolio.  Growing market confidence has led to saving in borrowings costs for GoP as banks are now dominant participants in auctions.

It was highlighted that debt to GDP ratio has been distorted due to economic compression. Advisor Finance instructed that option of tapping sharia compliant bonds may also be exercised to diversify the portfolio. Finance Secretary shared that with every one percent decrease in policy rate, saving of Rs 50 billion in debt servicing is expected.

The DG Debt shared the details about repricing options for existing domestic debt portfolio, in case of interest rate cuts. The strategy of raising major chunk of financing needs through floating rate bods, during high interest rate environment was appreciated.  Advisor Commerce advised that debt managers must keep eye on the yield curve inversion and its implications on borrowing choices in a macroeconomic climate dominated by recessionary headwinds. Dr. Ishrat Husain highlighted the significance of broadening the investors’ base in the pursuit of better price discovery.  

Finance Secretary shared plans on further expenditure squeeze, rationalizing all domains of current expenditure including running of civil government, interest payments, subsidies and other related expenditures. Plan was shared to divert current expenditure savings to Corona Stimulus financing, under the vision of Prime Minister of Pakistan.  Finance Secretary apprised that core areas of reform pertain to general austerity and discouraging Supplementary Grants as principle. He also shared the proposal of disbursement of electricity subsidy to subsistence consumers through Ehsas, damage control in PSEs including their selective turnaround and scope of their management outsourcing through PPP modalities. The team deliberated on the transfer of four tertiary care hospitals from Provinces to Federation in the backdrop of new NFC talks, as the act would place additional recurring liabilities worth Rs. 27 billion per year on the platter of Federal Government. The ongoing work on right sizing of Federal Government by PM’s Task Force under Dr.  Ishrat Husain was appreciated as it is expected to bring long awaited fresh breeze in the corridors of status quo driven bureaucracy. 

The Economic Coordination Committee (ECC) of the Cabinet has approved a multi-billion agriculture package to provide the farmers subsidy on fertilizers, reduction in bank mark-up on agriculture loans, subsidy on cotton seed and white fly pesticides and sales tax subsidy on locally manufactured tractors.

The agriculture package is part of the Rs 100 billion earmarked out of the Rs 1,200-billion coronavirus relief package, for the Small and Meidum Enterprises (SMEs) and the agriculture sector. The agriculture package was proposed by the Ministry of National Food Security and Research at a cost of Rs 56.6 billion but the ECC chaired by Adviser to the Prime Minister on Finance & Revenue Dr Abdul Hafeez Shaikh asked the Ministry of NFSR to rationalize it as per its share in the overall Rs 100 package announced for the SMEs and the agriculture sector out of the Rs 1200 billion coronavirus relief package. The ECC had already approved a Rs 50 billion package for the SMEs to provide indirect cash flow support to nearly 3.5 million people through pre-paid electricity.

Under the agriculture package as prepared by the Ministry of National Food Security and Research in consultation with the stakeholders, subsidy to the tune of approximately Rs 37 billion would be offered to farmers on the purchase of fertilizers. The amount would include a subsidy of Rs. 925 per bag on DAP and other Phosphatic fertilizers and Rs. 243 per bag on urea and other nitrogen fertilizers. The ECC was told that the estimated Urea offtake would be around 3.04 million ton while DAP was estimated at 0.95 million ton for the Kharif season. The subsidy scheme will be implemented by the Provinces and the amount will be disbursed through scratch card scheme already being implemented by the Province of Punjab. The ECC was told that the fertilizer share in cost of production for major crops was around 10 to 15 percent and the provision of subsidy would reduce cost of production for farmers and increase their affordability to adopt the recommended level of fertilizer nutrient use and best agricultural management practices.

Similarly, under the agriculture package, reduction in mark-up of agriculture loans to farmers at the total cost of Rs. 8.8 billion and subsidy on cotton seed at a cost of Rs 2.3 billion and White Fly pesticides at a cost of Rs 6 billion were also approved. The package would also include Rs 2.5 billion subsidy on sales tax on the locally-manufactured tractors for a period of one year.

Earlier, the ECC discussed various features of agriculture relief package in detail and lauded the efforts of the Ministry of National Food Security and Research for preparing a comprehensive package for the farmers. However, the ECC called for inclusion of other banks along with ZTBL in the scheme to enhance outreach of farmers with focus on subsistence farmers with a land holding of 12.5 acres. It was also suggested that since markup had been reduced by the State Bank of Pakistan, the interest rates used in the proposal could also be rationalized accordingly. The ECC also called for the implementation mechanism, especially through the scratch card system, to be monitored carefully to ensure that the actual beneficiaries of package were genuine farmers. It was also pointed out that since with the provision of subsidy on fertilizers demand for the fertilizers might increase, the same had to be communicated to the Ministry of Industries and Production in time to make arrangements accordingly. The Minister NFSR assured that the regular offtake of fertilizer was being subsidised, however, any increase would be communicated to the relevant Ministry.

During the meeting, the ECC also approved a proposal by the Poverty Alleviation & Social Safety Division for disbursement of the Special Relief Package for the population living along the Line of Control in a single installment of Rs 12,000 for six month months from 1st January to 30th June 2020 while from July onwards, LoC families would be disbursed monthly installments of Rs 2,000 each till 31st December 2020.

The ECC also took up different proposals for technical supplementary grants by various divisions and approved one proposal by the Defence Division for technical supplementary grant of Rs 16.6 billion to meet the expenses on POL, utilities and medical stores maintained by the Defence Services and another proposal by the Finance Division for a technical supplementary grant of  Rs 288 million for payment of salaries to the employees of Pakistan Machine Tool Factory for the period from October 2019 to June 2020. The ECC also approved a proposal by the Ministry of Law and Justice for technical supplementary grant of Rs 40 million for the employees related and operating expenditures of the Federal Judicial Academy.

The ECC also took up a proposal by the Ministry of Industries and Production regarding the human resource rationalization of workforce of Pakistan Steel Mills at a cost of Rs 18.74 billion to be paid for retirements and termination dues of over 8000 of 9000 PSM employees. The ECC discussed the proposal in detail and asked the Ministry of Industries and Production to re-work the scheme in consultation with the PSM Management to extend its scope to a maximum number of PSM employees and bring it back to ECC.

The ECC also discussed the Mobile Device Manufacturing Policy as proposed by the Ministry of Industries and Production with the objectives of technology acquisition and localization of mobile devices through local investment, joint ventures, foreign direct investment; creation of 200,000 direct and indirect jobs, price reduction for consumers, increase in digitization through supporting 4G/5G technologies, development of efficient manufacturing eco-system, exports of competitively manufactured handsets and achievement of security objectives. The ECC discussed various components of the policy and approved it in-principle with instructions to the Ministry of Industries and Production to further fine-tune its various features and incentives for promoting localization and research and development leading to export of mobile phones.

The ECC also considered and approved a proposal by the Ministry of National Food Security and Research for release of 35,000 metric tons of wheat from the PASSCO to the Azad Jammu and Kashmir government at a cost of Rs 1.52 billion, including cost of wheat and incidental charges, to be paid 50 per cent by the federal government from the stimulus package announced to fight against COVID-19.

Adviser to the Prime Minister on Finance & Revenue Dr Abdul Hafeez Shaikh has said that the government is carefully trying to keep a balance between protecting the health of its citizens and the economy by opening only essential services and the sectors of the economy such as logistics, retail of essential items and construction where safely possible.

“We are also trying to get in the hands of the citizens and businesses as much liquidity as possible through direct cash transfers payment of tax refunds, subsidized credits and payroll loans to ensure that the recovery path once the pandemic is over, is not affected,” he said while talking to Ms Anne Marie Trevelyan, MP and Secretary of State DFID, during a video conversation here Wednesday.

The Adviser lauded the support of DFID in various social sectors, particularly healthcare and education sectors in Pakistan and asked the DFID leadership to extend technical support to Pakistan to combat the threat of swarm locust to standing crops and vegetation in Pakistan. He also appreciated the role and support of the British government in the G-20 initiative for loan deferment to poor countries in the wake of COVID-19 crisis and hoped the British government would use its influence at other similar forums for debt relief and debt deferment to the countries trying to fight the effects and devastation caused by the coronavirus.

Ms Anne Marie Trevelyan shared with Dr Abdul Hafeez Shaikh important updates on various aspects of the British government strategy to deal with the threat and aftermath of the COVID-19. She said the British government valued its relationship with Pakistan and considered the DFID support to uplift of social sector in Pakistan as a sign of its long-term commitment to the country and its people.

Minister for Maritime Affairs, Syed Ali Haider Zaidi, called on the Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh here at the Ministry of Finance.

The Minister for Maritime Affairs discussed with the Adviser Finance the Financial requirements of the Ministry for various ongoing projects at the Ministry of Maritime Affairs for which the financial assistance will be required in the next financial year. He also discussed the financial requirements of the Ministry to contest the Elections for International Maritime Organization (IMO) Council for the term 2022-2023, the elections shall be held in December 2021. The Minister said that the financial implications of the process have already been prepared in consultation with High Commission of Pakistan, London, UK and submitted to the Finance Division.

The Adviser assured the Minister for Maritime of his full support for the projects and said that the he hopes that the Ministry shall be able to fulfill all requirements in the already allocated Indicative Budgetary Ceiling for the financial year 2020-2021.

Mr. Bernhard Stephan Schlagheck_ Ambassador of Germany accompanied by French Ambassador Dr. Marc Barety and Economic Counselor _Mrs. Anais Boitiere, called on the Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh here at the Finance Division.

The Advisor welcomed the Ambassadors and shared with them the overall picture of the country’s economy amid the Corona Virus pandemic and its future impact on the overall progress of the economy. He shared that before the pandemic Pakistan was successfully able to control its current account deficit and was expecting a growth of 3% during the ongoing financial year after observing strict financial discipline. However, after the outbreak the growth projections have become difficult to realize. He shared that due to the ongoing circumstances it is expected that the growth might remain between -1% to -1.5%. He then, told the ambassadors about the details of the relief package offered to the vulnerable by the Prime Minister through Ehsaas Program and the steps which the government is taking to support the SME sector.

The Ambassadors then discussed with the Adviser the details of the debt rescheduling offered by G-20 countries and the need for any further loans. The Adviser said that Pakistan’s firm stance in favor of debt rescheduling drive at the G-20 forum was based on the belief that the poorer countries genuinely require this assistance though Pakistan Specifically had benefitted lesser from the said relief. He also shared that $1.8 bn due in debt servicing to G-20 countries till December 2020 are under process of rescheduling. Pakistan is not going for any commercial loan rescheduling until now, said the Adviser. The Finance Division shall adhere to the requirements of Debt Limitation Act before planning to take up additional burden as most of the loans will be for the purpose of clearing old debt stocks, shared the Adviser.

The Adviser appreciated the support offered by the friendly countries and said that he hopes that the cooperation will continue in future for the benefit of the people of the three countries.

Dr. Abdul Hafeez Shaikh, Advisor to the Prime Minister on Finance and Revenue, formally launched the Secured Transactions Registry (STR) today.

The STR, established under the Financial Institutions (Secured Transactions) Act, 2016,for registration of security interests/charges created by entities other than companies on their movable assets,has been operationalized by the Securities and Exchange Commission of Pakistan (SECP).The STR is an electronic register that can be accessed through a dedicated website 24/7. Financial institutions can now file security interests online. Registration process is fully automated and the registry is searchable by general public, free of charge.

The launching ceremony was chairedby the Advisor to the Prime Minister on Finance and Revenue-Dr. Abdul Hafeez Shaikh and attended by Governor State Bank of Pakistan (SBP)-Mr. Reza Baqir,Chairman SECP-Mr. Aamir Khan, Chairman Board of Investment-Mr. Atif R.Bokhari, Chairperson, Karandaz Pakistan-Dr. Shamshad Akhtar, CEO, Karandaz Pakistan-Mr. Ali Sarfraz,Department Head of International Development (DFID)Pakistan-Ms. Annable Gerry, Country Director World Bank in Pakistan- Mr. Illango Patchamuthu, Commissioners SECP-Mr. Shaukat Hussain and Mr. Shauzab Ali.

In her address at the occasion, Ms. Annable Gerry, lauded the efforts of the financial sector regulators for their thought leadership and progressive role. Dr. Shamshad Akhtar also praised the SECP leadership and assured of Karandaz Pakistan’s continued support for the SECP’s technology projects. Governor SBP and Chairman SECP also spoke on the occasion.

Speaking at the occasion, Dr. Abdul Hafeez Shaikh appreciated the support offered by the British Government, through DFID and Karandaaz, and collaboration between SECP, SBP,Board of Investment and the World Bank for the successful implementation of this reform. He particularly lauded the commitment demonstrated by the SBP and SECP teams, and the hard work of the SECPfor spearheading this initiative, and its completion within a year of its assignment to the SECP in March last year.

The Advisor, while discussing the importance of this initiative, highlighted that Micro, Small and Medium Enterprises (MSMEs) play a vital role in the economic development of the country due to their significant contribution in terms of output, exports and employment.Particularly, SMEs constitute approximately 90% of businesses in Pakistan, employ 80% of the non-agricultural labor force and contribute 40% in country’s annual GDP. He noted that despite playing a significant role in economic growth of the country, SMEs access to formal finance is limited to only 6% of the total financing by the banking sector.

The Advisor was optimistic that this initiative would prove to be a game changer by improving the access to finance for the MSMEs, Agri borrowers and rural enterprises. The commencement of the registry will broaden the scope of assets that these underserved segments can offer as a security for availing the finance.On the other hand, this reform will also help banks to expand their lending portfolios.The operationalization of STR will contribute towards improving Pakistan’s score on ‘getting credit indicator’, and in particular raise its global ranking on the World Bank’s Doing Business’index.

The launch of STR is yet another millstone achieved by the current government that is a testamentto its commitment towards improving financial inclusion, growth of the private sector and ultimately, the economic development of the country.

British High Commissioner Dr. Christian Turner called on the Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh here at the Finance Division. Ms. Annabel Gerry – Head of DFID also accompanied the High Commissioner.

The Adviser exchanged views with the High Commissioner and Head of DFID on matters of common interest and specially thanked DFID on its cooperation in the recent launch of “Secured Transaction Registry”. He said that the cooperation between Pakistan and DFID will continue in future for overall prosperity of the people and businesses.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired a meeting here at the Finance Division with the members of Pakistan Dairy Association via video link.

The representatives of the Dairy Association discussed with the Adviser the issues the industry has been facing in the recent years and put forth suggestions that could help the Industry flourish and expand its base in the near future. They particularly requested the relief in taxation matters which could make the industry more compatible with the informal sector.

The Adviser said that he is aware of the importance of the industry and the foremost objective of the current government is to support businesses and provide employment. The Adviser directed that a special committee may be formed under the chairmanship of Secretary Finance with representatives from FBR and the Dairy Industry. This committee shall give its report within the a fortnight week and will provide information/data regarding the profit and loss situation of the dairy business across the country, the current rate of utilization of its full capacity and future possibilities of growth, the cost of relief requested for the government, the overall implications of the relief measures for the industry’s growth, institutional arrangements that could help in the discharge of their liabilities any other factors that should be considered.

The Adviser said that the government shall consider the requests of the Dairy Association with an open mind after reviewing all the facts and related data that could help in taking the best decision in favor of the economy and well being of the people.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired a meeting here at the Finance Division to deliberate on the contours of a financial assistance package for the Small and Medium enterprises in the wake of the Corona Virus pandemic. Minister for Industries and Country Director World Bank also participated in the meeting.

The assistance package would explore the possibilities of supporting the small and medium sized enterprises, formal or informal, which are employing 5 to 30 people but have suffered losses due to the recent lockdown. The ways and means to support the firms to continue their production and to enable them to pay their fixed costs and support their workers were discussed in detail. The Adviser said that the focus of the scheme should be that the workers attached with these small businesses should not be laid off from their work because of the un-sustainability of the business. Provision of basic IT related skills to the smaller businesses was also discussed, such skills/ expertise would help the workers as well as the businesses to continue their entrepreneurship in the odd and difficult times.
It was also agreed that the cooperation of SMEDA and Punjab IT Board will be sought to make the package implementable.

The Economic Coordination Committee (ECC) of the Cabinet has asked the Ministry of National Food Security and Research to closely monitor the wheat procurement process and actively engage with the food departments and PASSCO to ensure procurement of wheat as per 8.25 million tones target set for procurement by the public sector this year.

The ECC meeting chaired by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh further asked the Ministry of National Food Security and Research to submit to ECC a detailed report in the next two to three weeks on the progress of wheat procurement by PASSCO and provincial food departments and overall wheat production in the country with the help of reliable data and figures to have a clearer picture for better planning in future.

The ECC also called for exploring possibilities for extending more time to flour mills to procure wheat from the market, allowing inter-provincial movement and preventing smuggling of wheat outside Pakistan. The ECC gave the instruction after a report was presented to it by the Ministry of National Food Security and Research on wheat procurement by the public sector in the current season. The Ministry, in its report, told the ECC that the wheat procurement target for the wheat crop 2019-20 was set to 8.25 million tones with 4.5 million tones to be procured by Punjab, 1.4 million tones by Sindh, 0.4 million tones by Khyber Pakhtunkhwa, 0.1 million tones by Balochistan and 1.8 million tones by PASSCO. So far PASSCO and the provincial food departments had procured 3.96 million tones of wheat, approximately 48 % of the target while the procurement pace was slow in KP and Balochistan and both the provinces had been requested to speed up the procurement process.

The ECC also took up another proposal by the Ministry of National Food Security and Research for fixing an intervention price for cotton and after a detailed discussion asked the Ministry to come up with a comprehensive package focusing on cotton seed research, overall research and development, better water management, deregulation of the sector and zoning of crop growing areas to enhance productivity and competitiveness of the local crop.

The ECC also discussed and approved five separate supplementary grants on different proposals submitted by various divisions. On two separate proposals for technical supplementary grants by the Defence Division, Rs 1.665 billion grant was approved for upgradation of Special Telecom Monitoring Project at Directorate ISI and a Rs 500 million for construction of Special Education School at the Defence Complex Islamabad. On a proposal by the Prime Minister’s Inspection Commission, a technical supplementary grant of 10.476 million was approved for assistance package for the family of Mr. Raees Anwar Abbasi, Senior Private Secretary (BS-19), Prime Minister’s Inspection Commission following his death on 12th August 2019. On a proposal for technical supplementary grant by the Poverty Alleviation & Social Safety Division, an amount of Rs12.143 million was approved following transfer of the subject of “Collection of Zakat and Ushr, disbursement of Zakat and Ushr to the Provinces and other areas as per formula approved by the Council of Common Interest” from Religious Affairs & Interfaith Harmony to the PA&SS Division and subsequent transfer of officers along with their posts and budgets by the Ministry of Religious Affairs & Interfaith Harmony to the PA&SS Division. On another proposal for technical supplementary grant by the Finance Division, the ECC approved Rs 306.615 million for the Office of Controller General of Accounts during FY 2019-20 for payment of dues on account of Prime Minister’s Assistance Package.

On a proposal by the Ministry of Interior, the ECC allowed Capital Development Authority (CDA) Islamabad to allocate Rs 3.05 billion to the Metropolitan Corporation Islamabad (MCI) on loan basis for payment of obligatory expenses for the second half of the FY 2019-20.

The ECC also considered and approved a proposal for reconstitution of a Committee formed by the ECC in its meeting on 26th March 2020 for examination of incentive package for the National Electronic Vehicle Policy by nominating the Minister for Industries and Production Mr. Hammad Azhar in place of Mr. Abdul Razak Dawood as Chairman and member of the committee following the cabinet reshuffle and including Secretary Commerce as member of the Committee in place of Adviser to the Prime Minister on Commerce and Investment Mr. Abdul Razak Dawood.

The ECC also considered and approved a proposal by the Ministry of Maritime Affairs for extension due to Corona pandemic of free period from five working days to 15 working days for cargo and containers landing for period up to May 31, 2020.

The ECC also approved another proposal by the Ministry of Maritime Affairs for technical supplementary grant of Rs 58 million as compensation of the demolished structures of Pakistan Coast Guards in order to provide 19 acres land previously in possession of Pakistan Coast Guards and vacated for Gwadar Free Zone and Right of Way of the Eastbay Expressway.

On a proposal by the Ministry of Energy for development of a new mechanism/criterion for disbursement of payments to the tune of Rs 300 billion through CPPA-G to the power generators, the ECC asked the Power Division to devise the requisite criterion for fair and equitable disbursement of payments to the power generators and come back to ECC for its approval.

On another proposal by the Power Division, the ECC approved shifting of most expensive loan from the books of PHL to Government of Pakistan and taking up of Rs 136.454 billion loan in the FY 2019-20 while other loans to be considered in the following financial years accordingly.

On another proposal by the Power Division, the ECC gave go-ahead to issuance of new sovereign guarantee by the Ministry of Finance in respect of fresh syndicated term finance facility for Rs 41 billion through Power holding Limited (PHL) for the purpose of set off/adjustment of existing PHL finance facility of Rs 41 billion executed in pursuance of ECC decision made on 7th June 2017.

The ECC, on a proposal by the Petroleum Division, asked the Finance Division to transfer Rs 11.7 billion in the NBP account for ensuring remittances to Kuwait as per schedule.

Taking cognizance of the SMEs finding difficulties in arranging adequate collateral and banks’ risk averseness in taking exposures for such lending under the SBPs Refinance Scheme to Support Employment and Prevent Layoff of Workers, Ministry of Finance has stepped forward to shoulder risk sharing with banks.  Accordingly, the Federal Government has allocated Rs 30 billion under a credit risk sharing facility for the banks spread over four years to share the burden of losses due to any bad loans in future.  Under this risk sharing arrangement, Federal Government will bear 40% first loss on principal portion of disbursed loan portfolio of the banks. This facility will incentivize banks to extend loans to collateral deficient SMEs and small corporates with sales turnover of upto Rs2 billion to avail financing under SBP refinance scheme.

Under the SBP’s Refinance Scheme to Support Employment and Prevent Layoff of Workers due to the impact of COVID-19, businesses that commit to not lay off workers in the next three months can avail credit through banks for the three months of wages and salaries expenses at a concessional mark up rate.

The risk-sharing mechanism being introduced today, that is expected to increase the banks’ incentive to lend to SMEs and small corporate under this scheme, was developed on the basis of feedback received from relevant stakeholders and in collaboration between MOF and SBP. Ministry of Finance’s swift approval of the subsidy to provide risk coverage to banks has made it possible for the SBP to launch this credit risk sharing facility for which relevant circular has been issued today.

SBP will continue to monitor the implementation of the scheme.

Adviser to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Shaikh chaired 3rd meeting of the Thinktank, here Sunday to assess the emerging situation resulting from Covid-19 related economic slowdown and its impact on individuals and businesses.

The forum has the  mandate to provide cognitive support to on-going response of the Federal Government  apart from extending help  in designing new initiatives and mid -course correction of  interventions already under execution. The forum has representation form eminent public finance practitioners, financial analysts, bankers, development and monetary economists and academia. The participants included Advisor to PM on Commerce, Finance Secretary, Dr. Ishrat Husain, Shaukat Tareen, Dr. Ijaz Nabi, Sultan Ali Allana, Arif Habib and Dr. Waqar Masood.

Advisor to PM on Finance engaged all participants in extensive deliberations, while defining that the focus of the forum would remain on the short term urgently needed measures to give boost to economy which is under acute stress due to both demand and supply compression. He emphasized the need to learn from international experience in designing fiscal, monetary and other policy responses by the Federal as well as Provincial Governments.

The Thinktank has devised an “Impact and Urgency Response Matrix” by identifying multiple actionable themes with low, medium and high economic impacts, pitched against short, medium and long time horizons. The participants discussed the evolving economic scenario and identified priority areas which carry the potential of giving maximum boost to economy through accelerating aggregate demand and easing out supply concerns while also ensuring stability of financial system which is equally critical in robust recovery of the economy.

Advisor to PM, Dr Abdul Hafeez Shaikh emphasized the need for evolving road map for chosen domains, thereby bringing clarity about what needs to be done and who will do it. The need for real-time data and research was highlighted in development of clear roadmap and implementation framework. The forum selected six broad priority domains including boosting social safety nets (Ehsas and allied initiatives), food security and safety of supply chains, boosting role of banks and financial institutions in appropriately designing incentives for market participants, kick-starting low and medium cost housing projects, making PSDP and Provincial ADPs responsive to labour intensive propositions and business facilitation through fiscal interventions.

The forum decided that fiscal proposals including changes in rates of Sales Tax, refunds etc. would be deliberated with FBR in detail, so that next Federal Budget addresses these burning concerns which are essential to spur consumer spending. Moreover, proposals related for financial and banking matters including review of payroll refinancing scheme, incentives to banks to finance MFIs and MFB, measures for enhancement of remittances and injecting additional liquidity to commercial banks by cutting CRR/SLR and CCB, were decided to be dealt by forum in more details.

Advisor to PM on Finance concluded the session with the consensus decision that detailed roadmaps for chosen six domains would be prepared so that respective Ministries are engaged, to create further value in on-going plans meant for giving economic boost. It was further decided that implementation review of PM Economic Stimulus Package (worth Rs. 1240 Billion ) would be a regular feature in next Thinktank meetings to ensure value for money apart from smooth service delivery to deserving segments of society.

Executive Committee of the National Economic Council (ECNEC) has approved four major projects at a cost of nearly Rs 250 billion in a meeting held today at the Cabinet Block with Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh in the chair.

The meeting discussed a proposal for the construction of Lodhran-Multan Section (North Bound 62 kms) of N-5 and construction of 2 flyovers at Railways Crossing at Lodhran Bypass and approved the project at cost of Rs 12.434 billion. Under the project to be completed in 24 months, beside road two flyovers along with three interchanges at Super Chowk and Permit ChowkLodhran and an interchange at Bahawalpur Chowk Multan would be built. Besides, four minor bridges as well as reconstruction & widening of culverts and urban area improvement at BastiMalook, Multan City and Larr Town would also be carried out under the project. The reconstruction of existing two-lane northbound and construction of flyovers, interchanges and area improvements would help reduce traffic hazard and congestion on the project road and after completion of the project, a safe, reliable and efficient road facility would be available to the commuters.

The ECNEC also approved a project titled ‘Punjab Human Capital Investment Project’ at a cost of Rs 32 billion to strengthen primary health facilities, introduce conditional cash transfer program to encourage the poor to access the health and nutrition support, support economic inclusion for the young parents with children for poverty alleviation and expand and strengthen early childhood education. The project to be completed in five years would be rolled out in 11 less-developed districts of Punjab, including Bahawalnagar, Bahawalpur, Bhakkar, Dera Ghazi Khan, Khushab, Layyah, Lodhran, Mianwali, Muzaffargarh, Rahim Yar Khan and Rajanpur. 

The ECNEC also considered and approved Khyber Pakhtunkhwa Irrigated Agriculture Improvement Project (KP-IAIP) at a cost of Rs 30 billion for improvement of 14,260 watercourses, installation of 10,000 acres high-efficiency irrigation system, construction of 5000 water storage tanks, provision of 500 laser land levelers, capacity building, strategic studies and value addition, and project management and monitoring. The project to be completed in six years, would be rolled out in all 26 districts of the province.

Adviseto the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh has emphasized the need for better coordination among the stakeholders for arriving at consensus on targets of macro-economic variables and the required policy actions to achieve them.

He further stressed that all organs of the state should play their role in this difficult time to fully capitalize their potential to achieve set macro-economic targets as per their mandate. He was chairing a meeting of the Monetary and Fiscal Policies Co-ordination Board held at the Finance Division today. Other members of the Board present in the meeting were the Adviser to PM on Commerce and Investment, Deputy Chairman Planning Commission, Finance Secretary, Governor SBP and Dr. Asad Zaman. Chairperson FBR also attended the meeting on special invitation.

The Finance Minister in his opening remarks stated that this high powered Board facilitates the policy makers to review and coordinate in an effective manner to adopt a comprehensive set of policy actions to overcome the economic challenges that we are facing at internal and external fronts.

Secretary Finance presented that the government has embarked on a journey towards stability and sustainable inclusive growth through various structural and policy adjustments that have paid off in the form of decline in current account deficit, fiscal deficit, buildup of foreign reserves, stable exchange rate etc. Thus for the first time primary balance posted surplus of Rs 104 bn during Jul-Mar, FY2020 (0.2 % of GDP) as compared to deficit of Rs 474 bn (1.2 % of GDP) during same period last year. He then presented the pre-Covid and post-Covid overview of the economy and stated that the pandemic has brought multiple challenges for Pakistan’s economy. Prior to coronavirus, the GDP growth was estimated at 3.24% for 2019-20 and after pandemic it may decline significantly.  The government has timely initiated a Fiscal Stimulus Package worth Rs 1.24 trillion encompasses emergency response, support to businesses and relief to citizens. Couple of other schemes approved by ECC and the Cabinet is also in place to minimize the adverse impact of the Covid-19.

Governor SBP appreciated the efforts of Ministry of Finance for curtailing fiscal deficit and achieving positive primary balance in first three quarters of current fiscal year. From Monetary perspective he briefed that SBP has given the stimulus to economy through cut in policy rate (425 bps) and increasing quantity of money by injecting additional liquidity. SBP has introduced number of measures and some concessional refinance schemes to address both the demand and supply side conditions for businesses. These include Temporary Economic Refinance Facility (TERF), Refinance Facility for Combating COVID-19 (RFCC) and Refinance Scheme for Payment of Wages and Salaries to the Workers and Employees of Business Concerns. These measures are aimed at facilitating the businesses to remain afloat during the crisis times. On the demand side, a cumulative reduction of 425bps in the policy rate is expected to address the high cost of borrowing issue.

Deputy Chairman Planning Commission apprised the meeting that coronavirus has declined the confidence of both consumer and investors. Thus both aggregate demand and supply has been disrupted and the society is following risk aversion behavior.  The government should provide further support in terms of simplification of processes and lowering administrative burden on businesses, and help SMEs find some ways to cope with emerging situation. However, accommodative fiscal and monetary policies adopted by the Government will be helpful in stimulating economic activities.

Adviser for Commerce and Investment was of the view that in prevailing situation exports will be around 21 to 22 billion, while imports will fall to 42 billion mainly due to decline in international commodity and oil prices. There is a risk of decline in remittances. However, due to decline in imports current account deficit may not be adversely affected. Even in these testing times, Pakistan’s exports to Africa and Middle East have remained positive and are growing which has been a direct outcome of the government efforts to explore new avenues in export markets. Dr. Asad Zaman emphasize the need of enhancing the capacity of institutions like Federal Bureau of Statistics for timely dissemination of authentic data that will be helpful to reset policy direction in the post Covid changing environment by setting realistic targets and to monitor and analyze the performance of relevant stakeholders.

A high-level meeting Tuesday underlined several challenges the country was likely to face on the economic front due to the impact of COVID-19 on the national, regional and global economy.

The meeting chaired by Adviser to the Prime Minister on Finance & Revenue Dr Abdul Hafeez Shaikh and attended by leading development partners, including World Bank, Asian Development Bank, DFID and UNDP, agreed that while it was too early to predict the impact of COVID-19 but if the crisis persisted then the manufacturing and service sectors as well as the exports were likely to be severely affected in the year 2020 while agriculture growth was likely to remain intact in Pakistan.

The participants of the meeting also predicted that due to an extended economic crisis, the fiscal deficit could rise to 9.6 per cent of the GDP while the impact on the poverty figures could also be higher due to closure of businesses and restricted economic activity due to the lockdown situation. In a worst-case scenario, the growth rate could remain negative at -1.57 per cent of the GDP.

During the meeting, it was pointed out that the COVID-19 crisis had drastically affected the global economy that could shrink by 3 per cent. Similarly, it was also felt that there would be negative growth throughout 2020 and the chances of recovery were expected from the start of 2021.

The meeting underlined the need for pursuance of a clear, transparent and unified plan of action combining a “whole of the country” approach backed by necessary constitutional measures to sail out of the crisis. Expenditure rationalization, particularly reduction of low-impact spending, and revenue generation were also emphasized as key areas of focus in coming months. It was felt that the construction sector could provide the key for resurgence of the economic activity.

The meeting also warned against the relaxation of the lockdown which could further increase the infection rate and put unbearable burden on the healthcare system which was already finding it hard to provide regular healthcare services due to increased focus on dealing with the COVID-19. It was suggested that Pakistan would be required to “reset and reboot” its economy to get above the red-line. It was felt that the second tranche of cash grants to those vulnerable segments who were adversely affected by the lockdown and closure of businesses would be required to further the relief efforts. Asian Development Bank informed the meeting that they are interested in giving local currency loan to Small and Medium Enterprises adversely affected by this crisis.

 It was also noted in the meeting that the speed, efficiency, and transparency with which Pakistan has already disbursed more than 75 billions to its millions of vulnerable population is unprecedented not only in Pakistan but in the entire region and such a  thing was unimaginable in recent past of the country.

Advisor to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Sheikh chaired the 2nd meeting of the Thinktank, recently constituted under the directions of Prime Minister, to deliberate on the Covid related economic downturn and mitigation of ensuing risks.

The forum has been mandated to provide platform for collective thinking on the emerging situation resulting from the Covid-19 related medical crisis and its spillover to economy. Its other members include Shaukat Tareen, Dr. Ishrat Husain, Dr. Ijaz Nabi, Sultan Ali Allana, Arif Habib, Dr. Waqar Masood. Advisor to PM on Commerce and Finance Secretary are also part of it.

After extensive deliberations on emerging themes, the forum  identified key areas for policy interventions, including monetary affairs and banking sector, fiscal matters and public finances, social safety nets, SMEs and large businesses, commodity prices, public health challenges and role of private sector and NGOs. Advisor to PM on Finance apprised the forum about developments at G-20 forum regarding debt relief package. There is potential for USD 1.8 billion debt deferment for one year under this, whereas proceeds worth USD 1.4 billion under IMF have already been received.

Participants highlighted the need for further downward revision in policy rate coupled with passing on the benefits of slashed oil prices in global market to public. The focus of the deliberations remained on strengthening of aggregate demand and supply of the economy, with emphasis on lower income groups and small firms.  Need for further liquidity for banks was discussed as strong and vibrant banking sector is essential to boost economy under such strong recessionary headwinds.

Ways to further encourage remittances, agriculture financing and timely lifting of crops and vegetables from small farmers were analyzed.  The forum discussed the need and scope for bailout package for large businesses and exporters apart from gauging the viability of reduction of GST on consumer goods, from 17% to 5%, to kick-start consumer spending for next 2 years. The constraints of FBR amid high revenue targets in a shrinking economy were highlighted by Finance Secretary. Decision in this regard would be made after detailed consultations.

The progress of ongoing cash disbursements under Ehsas program were shared. The need for gathering reliable data on recently laid-off works and timely cash transfers to the most vulnerable were emphasized.  Economists within the Thinktank stressed for the need of designing PSDP to facilitate labor intensive projects apart form crafting robust agriculture financing plans. The need for public private partnerships was elaborated to create fiscal space within public sector through these off-balance sheet financing arrangements which encourage private sector participation in public sector initiatives.

Professionals within group stressed for the need of oil price hedging, power sector debt securitization and creation of fiscal space through rescheduling of foreign and domestic debts. The need for designing lending programs for housing sector participants came under consideration including facilitation of end-users. The massive scope for mortgage backed financing in Pakistan was also highlighted.

Advisor to PM on Finance and Revenue took lead in picking most urgent themes for proper policy deliberations and decisions. He shared that Prime Minster of Pakistan may participate in the next session to give boost to the work of this Forum which has been constituted to provide intellectual and professional insights to the Ministry in designing and implementing incentives for economy in pragmatic fashion.

Advisor decided that interventions with highest, medium and low impacts would be sorted out and aligned on the basis of short, medium and long term time horizons so that most essential tasks are pushed on priority basis, with proper funding and execution arrangements.   

It was also decided that international think-tanks will be engaged for cross-leaning for select policy making players in Pakistan so that robust interventions are designed to bring relief to economy and most deserving segments of public. 

Chinese Ambassador to Pakistan Mr. Yao Jing called on Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh at the Finance Division here Friday.

During the meeting, both sides discussed matters of mutual concern and decided to further strengthen bilateral collaborations. The Chinese ambassador lauded the relief package announced by the government for the people and business community and also appreciated the government response to tackling the spread of coronavirus in the country.

Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh on Thursday chaired a high-level meeting to discuss and review issues being faced by the telecom sector. 

During the meeting also attended by Minister for Industries & Production Muhammad Hammad Azhar, Special Assistant to the Prime Minister on Overseas Pakistan Sayed Zulfikar Abbas Bukhari, Secretary IT & Telecom, Secretary Finance and CEOs of major cellular companies, various issues being faced by the telecom and cellular companies were discussed and debated. 

Secretary IT & Telecom Mr. Shoaib Siddiqui told the meeting a high-level committee had already been constituted to formulate recommendations for the resolution of the issues being faced by the telecom sector and its final recommendations would be completed by 28th April 2020. 

The Economic Coordination Committee (ECC) of the Cabinet has approved release of Rs 75 billion from PM’s Relief Package of Rs 200 billion for targeted payments to the low-income groups, especially labourers and daily wagers most severely affected by the lockdown situation in the country.

The decision was taken at a meeting of the ECC held at the Cabinet Block today with Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh in the chair.

Under the decision, disbursement of Rs 12,000/- per selected person would be made using the Ehsaas disbursement mechanisms under a programme called “Mazdoor Ka Ehsaas Programme”. For this purpose, a fourth category in addition to already existing three categories in “Ehsaas Kifalat”, would be created and standard filters/checks of Ehsaas Program would be applied for identification of the beneficiaries.

Earlier, the ECC was told that after the usual filters and checks, up to 6 million low-income people were expected to benefit under the planned 4th category in addition to the 12 million labour population already targeted through category 1-3 of Kifalat. “Mazdoor Ka Ehsaas Programme” was aimed at extending much-needed support in the current situation to the low-income labour/daily wagers mostly involved in activities such as loaders, cleaning staff, contract employees, piece rate workers, self-employed street vendors, construction workers, painters, welders, mechanics, carenters, domestic help, drivers, etc.

The ECC also asked the Ministry of Industries and Production and the Poverty Alleviation and Social Sector Development Division (PASSD) to jointly work out comprehensive mechanism and modalities to ensure a transparent and efficient disbursement of the support to the deserving people. 

During the meeting, the ECC on two separate proposals approved a technical supplementary grant of Rs 606 million for 19 projects to be implemented by the Government of Balochistan for FY 2019-20 and another technical supplementary grant amounting to Rs 7 million for purchase of spare parts for helicopter maintenance by Frontier Corps Balochistan (North).

The ECC also approved release as government loan of Rs 1.30 billion in the current financial year and Rs 3.85 billion per annum during the next three years for settlement of the outstanding liabilities of litigants in the case involving Pakistan Steel Mills (PSM).

On a proposal by the Ministry of Commerce, the ECC approved notification of the Export Policy Order, 2020 and Import Policy Order, 2020 in consolidated form as per the Law Division’s recommendations for the convenience of the business community.

The ECC also approved a proposal by the Ministry of Overseas Pakistanis and HRD for approval of the budget proposal for the year 2019-20 & revised budget estimate for 2018-19 of EOBI.

The ECC, on a proposal by the Ministry of Climate Change, approved exemption from the Re-lending Policy of the Government in respect of a USD 188 million World Bank IDA for the Pakistan Hydromet and Ecosystem Restoration Services Project.

The ECC also accorded principled approval to a proposal by the Ministry of National Health Services for provision of Rs 150 million funds as grant in aid/seed money for Islamabad Healthcare Regulatory Authority, the ECC asked the Secretary Finance and Secretary Health to jointly to work out modalities for the arrangement of funds.

On a proposal by the Ministry of Industries and Production seeking a supplementary grant of Rs 288 million for payment of salaries to the employees of Pakistan Machine Tool Factory, the ECC asked the Finance Division and the Industries and Production Division to sit together and resolve the issue.

The ECC also considered a proposal by the Ministry of Maritime Affairs regarding arrest of PNSC ships in South Africa on account of alleged claims of M/s Coniston against Pakistan Steel Mills Ltd and asked the Finance Secretary to engage with the PNSC and PSM and seek opinion of the Law Division, if necessary, to resolve the issue having ended up in litigation.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh has said the government has vowed to resolve the liquidity crunch, cash flow and other allied issues being faced by the industry and businesses and work in this direction has already started by releasing more than Rs. 115 billion of the sales tax and income tax refunds as well as duty drawbacks held up for years.
He was chairing a meeting-cum-video conference arranged at the Finance Division with leading industrialists and businessmen of the country. Minister for Industries and Production Muhammad Hammad Azhar, Adviser to the Prime Minister on Commerce and Investment Abdul Razak Dawood, Chairperson FBR Ms Nausheen Javaid Amjad and senior officials of the Finance Division were also present.

Dr Abdul Hafeez Shaikh heard various proposals and suggestions from the businessmen to support and provide relief to the industries and assured the participants of the conference that the government would carefully and favourably study all the proposals and all the major issues faced by the industry and businesses would be resolved and a comprehensive relief package would be offered to the industry.

He briefed the meeting that the government had released Rs 52 billion of the claimed Rs 57 billion to exporters through the Faster system and Rs 25 billion out of the Rs 52 billion sales tax refunds for other sectors and industries while the remaining would also be cleared within next one week. Similarly, the government had also cleared about Rs 30 billion tax refunds under the DLT, while Rs 15 billion duty drawbacks had also been paid. “Not only this, the government has also decided to pay within the next week all Income Tax refunds held up since 2014 and this measure alone would benefit nearly 100,000 taxpayers who would be paid over Rs 50 billion worth of refunds,” he added.

Earlier, the businessmen and industrialists giving their proposals and suggestions called for an inclusive relief package that addressed the needs of the large-scale as well as SME sectors.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh has constituted a five-member committee including senior officials from Finance Division and the FBR to sit with representatives of the retail sector and finalise proposals for providing relief to the retail sector, in the wake of prevailing situation.

The Adviser made this decision while chairing a video conference arranged at the Finance Division with the representatives and office-bearers of Retails Association of Pakistan to discuss the problems faced by the sector and their possible solutions. The Association representatives said that the retail sector in Pakistan was contributing 18 per cent to the GDP besides employing 16 per cent of the labour force. They said that due to prevailing circumstances they are foreseeing negative growth in current year, hence it was imperative to provide relief, particularly in taxes, to the retail sector, especially the integrated sector.

Dr Abdul Hafeez Shaikh said that the government was keen to help the retail sector and constituted a committee to further discuss and firm up proposals offered by the representatives of Retails Association of Pakistan before the next meeting which would finalise the proposals. He directed the committee to follow a quick-action approach to decide the mechanism of support as the government wanted to alleviate the hardships being faced by the various sectors of economy.

Ambassador of the People's Republic of China, Mr. Yao Jing, called on the Adviser to Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh here at the Finance Division.

The Adviser welcomed the Ambassador and thanked the Chinese Government for all the assistance it has provided so far to Pakistan in dealing with the Corona Virus Pandemic. He then shared with the Ambassador the details of the Economic Relief Package given by the Government of Pakistan to the people whose lives and businesses have been effected by the pandemic. He said that during this difficult time, the government has three major priorities: to provide health care and safety to its people, provide cash assistance to the most vulnerable and keep the wheel of the economy moving in slow but steady pace. The government has came up with a comprehensive relief package of worth Rs 1.2 trillion, which inter alia includes, Rs 200 billion assistance for workers and labourers, Rs 100 billion for supporting SME and Agriculture sector, Rs 107 billion as sales tax refunds and Rs 50 billion income tax refunds from 2014 onward. Moreover, Ehsaas Program through its urgent cash disbursement is taking care of the most vulnerable in the country. Reduction in petrol and diesel prices and deferment of payment of bills are some other significant steps. Incentivizing the construction sector is also an opportunity for those who are in need of work.

The Adviser also discussed with the Ambassador the effect of the Corona virus Pandemic on the overall growth of the economy of the country as exports and remittances shall both suffer as the global economies are in recessionary phase. He said that different economies have different levels of strength to deal with the economic losses and the developing countries will be the worst hit by the impact of this slow down. Keeping in view the present circumstances World Bank, IMF and G-20 countries are talking about debt relief without which developing countries will be worst affected. The Adviser expressed hope that these forums would be able to come up with a plan enabling developing countries like Pakistan to not only meet its international obligations but also to provide relief to its population adversely effected by this pandemic.

The Adviser said that Pakistan looks forward to Chinese support in dealing with this unprecedented situation arising because of this pandemic.

Adviser to the Prime Minister on Finance and Revenue chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet here at the Cabinet Division.
ECC approved six technical supplementary grants;

i)     Rs. 842 millions for paying off the Executing Agencies of the Prime Minister's youth loan scheme during the current financial year.
ii)    Rs. 90.459 million for Pakistan Nuclear Regulatory Authority, to help PNRA meet its obligations.
iii)   Rs. 5.00 million in respect of Punjab Rangers to enable Ministry of Defence to purchase spare parts for the maintenance of helicopter during the current financial year.
iv)   Rs. 2.074 million, received as grant from the US Embassy in favor of HQ Frontier Constabulary Peshawar for the construction of Frontier Constabulary Training Center at Michni Shabqadar.
v)    US $.1.5 million for the Ministry of  energy to pay the legal counsels hired on behalf of the State in the international litigation case against Ms. Karkey.
vi)    Rs. 300 million in favor of Ministry of Information and Broadcasting to execute the communication campaign for the Ehsaas Program in the next three months.

On the summary moved by the Economic Affairs Division for the recovery of foreign currency loans from the Private Sector borrowers, i.e Ms Gladari Cement Limited, ECC decided that EAD should resubmit the proposal after consultation with State Bank of Pakistan.

On the proposal by the Ministry of Energy for allowing foreign exchange gains/losses in excess of 7% on delayed payment for Kohala Hydro power project, ECC directed State Bank of Pakistan to negotiate with all relevant stakeholders and come up with a viable and practical solution of the issue.

ECC approved Rs 50 billion (as TSG) for the Utility Stores Corporation announced under PM relief package. Utility Stores Corporation was further directed by the Chairman ECC to be ensured provision of essential items at reduced prices to the people in the wake of current situation prevalent in the country due to COVID-19 as well as during the approaching month of Ramadan. Rs. 21 billion have already been disbursed to the USC after December 2019 for the procurement of essential items and the MD, USC assured the ECC that it is effectively utilizing its market presence for providing affordable goods to people in this hour of need.

Ambassador of Japan, Mr.Kuninori Matsuda, called on the Adviser to the Prime Minister on Finance and Revenue, Dr Abdul Hafeez Shaikh here at the Finance Division.

The Ambassador shared with Adviser Finance the steps being taken by the Japanese Government to contain the Corona Virus pandemic and the impact they had created so far. The Japanese Ambassador said that the Japanese Government supports the People of Pakistan in these trying times and is ready to offer its expertise and any sort of assistance to the government of Pakistan if the situation so requires. The Ambassador also discussed certain issues of the Japanese investors in Pakistan arising out of the restrictions on business activities.

The Adviser appreciated the efforts of the Government of Japan to control the Pandemic and thanked the Japanese government for its support to the people of Pakistan.

British High Commissioner Dr. Christian Turner, called on Adviser to Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh here at the Finance Division.

The Adviser expressed his and the Government's commiseration with the High Commissioner on the deaths of the people due to Corona Virus pandemic. He said that it is a testing situation for the nations all over the world and every loss of life is a cause of concern. He further shared with the High Commissioner the losses that have taken place due to the pandemic and the strategy adopted by the government of Pakistan to provide relief to the people.

The British High Commissioner said that his Government fully supports the efforts of the Government of Pakistan to provide relief to its people and it is ready to provide any assistance, if required, in the form of aid through DFID. The High Commissioner assured that in the times of global crisis the British government stands with the people of Pakistan to further strengthen their already well established relationship.

The Adviser thanked the High Commissioner for his support and assistance in the hour of need.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired a meeting here at the Finance Division through video link with the business community. Adviser to PM on Commerce was also present during the meeting.

The business community shared with the Adviser Finance the current situation of their businesses and the issues they had been facing because of a global slump in business activities. It was briefed to the meeting that the daily wagers and SME sector is the worst hit during the crisis. The participants deliberated upon a feasible plan to distribute the amount earmarked in the Prime Minister's relief package for the daily wagers and laborers (Rs. 200 billion) to support them in the scenario of lesser business activities in the country. The participants from the business community committed to take care of their daily wagers with the help of the government and promised to fulfill their social responsibilities in the hour of need.

The Adviser directed that the mechanism for distribution of monetary assistance should ensure transparency and simplicity of procedures that the poor daily wagers may get relief without any complication.

The business representatives requested for the speedier refunds for providing them enough liquidity to manage their activities. The Adviser directed Chairperson FBR to expedite the process of refunds so that the business community is provided with maximum relief. Chairperson FBR briefed that she is personally engaged with her team and business representatives to speed up the matters.

The Adviser assured the business community of his full support during this difficult period and said that he hopes that the future is more promising for Pakistan's export sector after the crisis is over.

The meeting was also participated by Dr. Waqar Massod Khan, Mr. Ali Jameel, Mian M. Mansha, Mr. Shahid Hussain, Mr. Shahzad Saleem, Mr. Bashir Ali Muhammad, Mr. Ali Habib, Mr. Aurangzeb, Mr.Tariq Saigol, Mr. Almas Hyder, Mr. Shahid Soorty, Mr. Fawad Anwer, Mr.Saqib Sherazi, Mr. Tariq Habib and senior officials of Ministries of Finance, Commerce and FBR.