• 50pc discount in tariff till June 2021
• Peak-hour charges abolished
• 25pc relief on additional electricity usage for three years
• Centre likely to fix wheat support price slightly over Rs1,600 per 40kg

ISLAMABAD: Prime Minister Imran Khan on Tuesday announced a massive three-year relief package for the industrial sector, considerably reducing rate of commercial electricity on additional usage by small and medium enterprises (SMEs) and omitting peak-hour charges to encourage manufacturing.

The government also decided to fix a minimum support price of wheat that could be slightly over Rs1,600 per 40kg. At present, the support price of the commodity is Rs1,400.

These decisions were taken during the federal cabinet meeting held at the Prime Minister House.

“From November till June next year, industries will get 50 per cent relief in electricity tariff,” Prime Minister Khan said while presiding over the meeting.

“Industrial units will also get electricity at 25 per cent reduced rates with no peak hour,” he added. Despite the ongoing second wave of Covid-19 in the country, the prime minister said no industry would be locked down.

Later, in a post-cabinet meeting, Information Minister Shibli Faraz said: “Small and medium industries will get 25 per cent relief in electricity bill which is a major decision taken by the government.”

He said high tariff had been charged from industries during the peak hours from 7pm to 11pm, which was why they could not hold second or third shifts to enhance production.

“The decision will increase industrial growth and production, boost economy and provide more job opportunities,” the minister said.

Prime Minister Khan also held a separate meeting with his economic team and discussed the relief package in detail.

He was of the view that the package would promote industries in the country that had suffered losses in the past due to high cost of electricity.

After the cabinet approved the package, the prime minister said for the next three years, all industries, on additional usage of electricity, would be provided 25 per cent relief.

He also announced an end to peak-hour system for commercial electricity users, with uniform rates to be enforced round the clock.

“A strong infrastructure of energy is vital to help industries grow and compete in the international market,” the prime minister was quoted as saying.

“With 25 per cent expensive electricity rates, Pakistan lagged behind India and Bangladesh in terms of exports, therefore it is extremely important for the country to strengthen its industries as it will lead to wealth creation and help pay off debt,” he added.

Mr Khan regretted that contracts signed with power generation companies by the previous governments had resulted in production of expensive electricity, which was unaffordable for the industrial sector.

During 2013-18, he said the country’s exports dipped from $25 billion to $20 billion, with many industries shutting down due to high electricity bills.

The prime minister said after assuming charge, his team focused on increasing exports, as “higher the exports, stronger the economy”.

Minister for Industries and Production Hammad Azhar said under the package, prepared on the special instructions of Prime Minister Imran Khan and the cabinet, industries would be provided electricity at off-peak hour rate for 24 hours for the next three years.

He said SMEs would be getting 50 per cent tariff discount on the use of additional electricity during the next six months, while all industries would be provided additional electricity on 25 per cent reduced rates for the next three years.

Minister for Planning and Development Asad Umar said the government was not only making efforts to protect people from Covid-19 amid rising number of cases, but also trying to keep businesses and industries open for the benefit of the country.

Minister for Power Omar Ayub Khan informed the cabinet that the present government was bringing improvement in the power sector through bold policy decisions.

He said despite domestic resources, the previous governments were running power producing units on 75 per cent imported fuel for their personal gains.

The present government made a power production agreement for alternative resources, like solar and wind energies, at the rate of Rs6.5 per unit as against the previous regime’s agreements of Rs24 per unit.

Omar Ayub Khan said with regard to energy-mix, Pakistan would be meeting around 25 to 30 per cent of its electricity requirements through alternative resources by 2025.

Adviser to Prime Minister on Finance Abdul Hafeez Shaikh said with the target revenue collection having met during the first four months of the current fiscal year, growth in export, strengthening of industry, surplus current and primary accounts and a well-performing stock market were all indicators that the economy was on the right track.

He said the country’s debt did not register any increase during the last four months.

The adviser also gave an account of the government’s accomplishments, including bringing down the current account deficit from $20bn to zero, enhancing funds for social safety net from Rs100bn to Rs192bn, announcing Rs152bn package for the tribal areas as well as sales tax refunds amounting to Rs250bn for exporters.

Wheat support price

The cabinet rejected the recent decision of the Sindh government of increasing the minimum wheat support price from Rs1,400 per 40kg to Rs2,000 per 40kg and decided to fix the new support price, which is expected to range between Rs1,600 and Rs1,800 per 40kg.

When contacted, Information Minister Shibli Faraz said: “It will definitely be less than Rs2,000 per 40kg otherwise people will not be able to afford two times bread.”

Interestingly, the Economic Coordination Committee had approved Rs1,600 per 40kg as the wheat support price. However, when the matter was raised in the last cabinet meeting, Prime Minister Khan directed that all provinces should be taken on board in this regard.

The provincial government, led by Pakistan Peoples Party, has fixed the minimum wheat support price at Rs2,000 per 40kg for Sindh.

The federal government, on the other hand, is of the view that the provincial government had taken the decision for “political” gains and to further create wheat/flour crisis in the country.

“It is only the Centre’s prerogative to fix minimum support price of wheat and the decision of the Sindh government was based on dishonesty,” the information minister said.

He said the government’s economic team was holding a meeting to fix the new support price of wheat.

“It was Sindh which created wheat and sugar crisis in the country just to create problems for the Centre. The provincial government is once again trying to create a crisis,” he said, adding that the price of wheat flour would increase further if Rs2,000 per 40kg was fixed as the support price for the commodity.

Published in Dawn, November 4th, 2020