ISLAMABAD: The Economic Co­­or­dination Committee (ECC) of the Cabi­­net on Monday substantially enha­­­nced borrowing powers of the provinces to secure cash surplus for budget support in line with the International Monetary Fund (IMF) programme.

The meeting presided over Finance Adviser Dr Abdul Hafeez Shaikh also put in place a series of measures for import of about 2.5 million tonnes wheat to control its runaway prices and gave 45 acres of land to the Inter Services Intelligence (ISI) in Islamabad at a cost of Rs490m from the federal budget.

The Ministry of Finance had moved a case for special honoraria equivalent to up to three basic salaries to federal government employees at the discretion of federal secretaries but was withdrawn at the last moment. The summary proposed one-month basic salary to all employees, two-month salary to 10 per cent employees and 3-month salary to 5pc employees of the ministry with the consent of the minister concerned.

On the request of the Finance Division, the ECC approved a new lending policy to the provincial governments for their Ways and Means requirements and for signing of agreements by the division and the State Bank of Pakistan to implement the policy.

Package to ensure uninterrupted supply of oxygen gas and cylinders approved

Under the new policy, the existing Ways and Means limit for Punjab has been increased by almost 108pc to Rs77 billion from Rs37bn at present. The limit for Sindh was increased by 160pc to Rs39bn from Rs15bn at present, followed by 170pc increase for Khyber Pakhtunkhwa from Rs10.1bn to Rs27bn. The limit for Balochistan was also enhanced by almost 141pc to Rs17bn from Rs7.1bn at present.

The revised lending policy would allow the provinces to have higher overdraft limits to meet their expenses and salaries without waiting for the federal transfers on the basis of revenue collection with a time lag. The four provinces would provide about Rs242bn cash surplus to the centre during next fiscal year, in line with the government’s commitment under the IMF programme.

On a proposal by the Defence Division, the ECC allowed the Capital Development Authority (CDA) to collect charges against allotment of 45 acres land in Jagiot Farm, Islamabad to Directorate General of ISI at a rate of Rs2,250 per square yard with a total implication of Rs490.05m. The ECC also approved Rs490.05m grant for the purpose.

A proposal by the Finance Division for a grant of Rs1.3bn to meet critical demands related to medical stores and utilities for the Pakistan Navy was also approved.

'Ensure free wheat movement'

The ECC also re-affirmed its earlier decision of facilitating the private sector for wheat import, approved a series of administrative measures to contain over 25pc increase in flour prices in the market and decided to field public sector agencies for wheat import dep­ending on the performance and output of the private sector in this regard.

The meeting decided not to restrict the import of wheat to any limit by the private sector and to monitor the situation on monthly basis to ensure availability of the commodity in all parts of the country at a reasonable price. The financial implications of import or otherwise by the private sector should also be assessed, it was urged. “If there is no import by private sector, then the government should import wheat itself,” said an official statement.

The ECC also asked the provincial governments to announce their ‘Wheat Release Policy’ immediately. It requested Punjab to release 900,000 tonnes of wheat to flour mills of the province during next two months at a release price to be set by the Punjab government in order to prevent surge in prices.

The Pakistan Agricultural Storage and Services Corporation (Passco) was also directed to assess the immediate requirement of Khyber Pakhtunkhwa and Balochistan and arrange to improve supply wheat as per agreed targets. It also decided to facilitate the movement of wheat from Punjab to KP and Balochistan.

The ECC directed that overall free movement of wheat should be ensured across the provincial border points and districts and private wheat importers should be facilitated by putting in place arrangements between importers and the provincial governments (KP and Balochistan), besides calculating the impact of subsidy for the import, if any.

The meeting also desired that federal, provincial and district level authorities should improve monitoring and supply provisions to ensure availability of wheat at shortage points and other market imperfections unconnected to supply and demand of the grain should also be looked at.

The ECC also directed that focus should also be given to inter-relation between wheat and flour to increase conversion rate from wheat to wheat flour and there should be strong checks on the cross-border movement of wheat flour to restrict its flow out to Afghanistan.

The meeting also advised the Ministry of national food security ad research to develop a group for longer term strategy for the wheat availability throughout the year and also for medium-term.

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 approved five proposals by the Interior Division for technical supplementary grants, including Rs2.5bn to clear accrued verified liabilities of Punjab Mass-transit Authority (PMA) as federal share on account of operation of Pakistan Metro-bus System. These grants also include two separate grants of Rs200m and Rs36.40m for Islamabad Police to clear outstanding liabilities of Shuhada families and two separate grants of Rs105.62m and Rs60.58m for Islamabad Police to clear outstanding liabilities during CFY2019-20.

Published in Dawn, June 23rd, 2020