Tuesday Mar 24, 2020
ISLAMABAD: The government has announced an economic relief and stimulus package worth Rs1.2 trillion to help the local industry and offer "support to poor", Economic Affairs Minister Hammad Azhar said Tuesday, as employees and businesses across Pakistan bear the brunt of the coronavirus lockdown.
In a Twitter post, Azhar said the package "seeks to provide relief to vulnerable, support to poor, SMEs [small- and medium-sized enterprises], industry".
The relief package also included "deferment of utility bills of lower income grps, principal + interest for businesses, reduction in fuel prices and more".
According to Azhar, the salient features of the package are:
• Petrol and diesel prices to be reduced by Rs15 per litre
• 12 million individuals to receive Rs3,000 for four months
• Rs50 billion set aside for Utility Stores Corporation of Pakistan (USC)
• Concessional loans to SMEs and agriculture sector
• Taxes cut on essential commodities and more
• Electricity bills for current month to be converted to installments payable over next three months (applicable to those consuming 300 units or less, or 70% of consumers)
• Gas bills for current month to be converted to installments payable over next three months (applicable to 80% consumers)
• Deferment of loans (principal and interest inclusive) for SMEs, industries, and agricultural sector
• Government to provide risk guarantee to banks for fresh loans to SMEs
• Emergency fund worth Rs100 billion to be maintained
• NDMA to receive Rs25 billion for COVID-19 responses
A day prior, the minister had said on Twitter the proposals had been readied and that the package would relief to vulnerable segments and prevent job losses as the Pakistani economy feels the heat of the coronavirus pandemic with businesses remaining closed in various parts of the country.
Azhar had said the PM Office and members of the Cabinet, as well as representatives from various government divisions, had worked to finalise the proposals for the upcoming package.
"The objectives of the Economic Relief and Stimulus package is to provide relief to vulnerable segments, to prevent job losses, encourage smooth supply of essential goods at reasonable prices, support businesses and stimulate the economy," Azhar had added.
Earlier, top official sources had disclosed that Prime Minister Imran Khan's multisectoral relief package was based on a windfall gain — worth $5-8 billion — on account of the reduced international oil prices, which gave the government a cushion to pass the benefit on to the consumers.
The premier's finance adviser, Dr Abdul Hafeez Shaikh, held discussions with various stakeholders to finalise the salient features of a proposed fiscal package, the sources had said.
They had also revealed that the government decided in principle that it would not seek any additional funding from the International Monetary Fund (IMF) from its allocated additional resources of $50 billion but would regardless approach the financial body for convincing with regard to tax breaks and subsidies under the proposed fiscal stimulus package.