ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Wednesday approved a subsidy of about Rs49 billion for agriculture and housing sectors and allocated 150,000 tonnes of wheat from official stocks for the Pakistan Army.

A meeting of the ECC presided over by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh also approved setting up of a mineral exploration company in Balochistan and indicative price for tobacco crop.

As announced by Prime Minister Imran Khan on July 10, the meeting approved “markup subsidy for housing finance” worked out by the Naya Pakistan Housing and Development Authority. This involves special incentives for the housing and construction sector for revival of economic activities amid the Covid-19 pandemic. Markup subsidy will be provided for 10 years on bank financing.

Under the scheme, borrowers could avail loans for 10, 15 or 20 years, but the government will subsidise the interest on them for 10 years only. Accordingly, end user markup rate on housing units measuring up to five marlas will be five per cent for the first five years and 7pc for the next five years. For housing units measuring 10 marlas, the end user markup rate will be 7pc for the first five years and 9pc for the next five years.

Okays establishment of mineral exploration company in Balochistan

Subsidy will be given on housing units where the price does not exceed Rs3.5 million for 3-5 marlas and is not more than Rs6m in case of a 10-marla house. An amount of Rs33bn was allocated for a loan tenor of 10 years with Rs4.77bn to be provided in the current financial year for the payment of markup this year.

The ECC also took up a summary of the Ministry of National Food Security and Research (MNFSR) on utilisation of the fiscal package of Rs100bn allocated for the agriculture and SME (small and medium enterprises) sectors out of the Rs1.2 trillion fiscal and stimulus package for combating the Covid-19 pandemic. On the request of the ministry, the ECC approved diversion of Rs15.7bn earmarked for nitrogenous fertilisers to phosphate and potash fertilisers.

The meeting decided to immediately release and disburse about Rs14bn subsidy for the agriculture sector. It includes Rs6bn for whitefly pesticides, Rs1.5bn for tractors and markup of Rs6.8bn on all loans for 12.5 acres of land holdings disbursed by Zarai Taraqiati Bank Limited with passbook as collateral for FY2020-21 only to be adjusted through book and tax adjustment of the State Bank of Pakistan and the Federal Board of Revenue, respectively.

The ECC directed the MNFSR to properly monitor and evaluate the mechanism for disbursement of various subsidies for maintaining transparency of the system and to ensure that benefit reached small farmers.

The meeting decided to allocate 150,000 tonnes of wheat to the Pakistan Army from the stocks of the Pakistan Agricultural Storage and Services Corporation (Passco) on a payment basis for the year 2020-21. Passco will charge incidental and transportation charges on top of its procurement price from the farmers.

The meeting 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. The ECC directed the MNFSR to give a detailed presentation on the mechanism for determination of prices and also point out gaps in the system.

The meeting approved an allocation of Rs41.8m for the Ministry of Information Technology and Telecommunication (National Information Technology Board) for deployment of systems, data analysis, modeling and mobile apps for stakeholders of the National Command and Operation Centre and government departments with the instructions that wherever possible the budget may be rationalised and minimised in consultation with the finance division.

The meeting approved the establishment of Balochistan Mineral Exploration Company Limited (BMEC) with the support of the federal government. It will be a joint venture of the federal and Balochistan governments for formation and operations of the company with 10pc shareholding amounting to Rs320m to be injected in two equal tranches through the Pakistan Mineral Development Corporation (PMDC).

The petroleum division and the PMDC have been authorised to execute the shareholders agreement and complete all required legal, regulatory and corporate formalities in connection with formation, incorporation and equity participation in the BMEC. The Balochistan government will appoint the minerals and mineral development secretary as interim chief executive officer of the company and constitute a seven-member board of directors. The head office of the company will be established in Quetta, while a branch office will be set up in Islamabad.

Published in Dawn, July 23rd, 2020