ISLAMABAD: The Economic Coordination Commi­ttee (ECC) of the Cabinet on Thursday approved a Rs43 billion grant for Khyber Pakhtunkhwa to cover its cash shortfall, allowed signing of about $1bn worth of debt relief from G20 countries and agreed in principle for a $1.1bn requirement for procurement of vaccination.

The meeting of the ECC presided over by Federal Minister for Finance and Revenue Shaukat Tarin also approved more than a dozen supplementary grants worth a total of Rs47bn just two days ahead of federal budget and disallowed a couple of others for being too close to conclusion of fiscal year. The ECC is reported to have also approved a few other grants for civil armed forces which were not made public.

An official statement said the ECC approved Rs42.9bn for the Finance Division for ways and means advances availed by the provincial governments. Informed sources said the KP had availed ways and means advances beyond permissible limits and had to be covered through the technical supplementary grant.

These sources said the Annual Development Plan of KP was curtailed by Rs33bn to Rs244bn for next year to cover the financial gap even though its current year’s development plan of Rs274bn was also higher than next year. KP was the only province whose next year ADP was curtailed to make up for ways and means advances it had consumed this year.

The ADP of all the three other provinces for next year are significantly higher than current year ie Punjab’s ADP for next year at Rs500bn instead of Rs310bn this year, Sindh’s Rs321bn instead of current year’s Rs194bn and Balochistan’s up from Rs89bn to Rs133bn.

ECC directs vaccine procurement on a monthly basis

“The ECC expressed the government’s commitment to provide $1.1bn for procurement of Covid-19 vaccine for achieving the vaccination target (minimum 45 million and maximum 65 million) till December 2021,” said an official statement.

However, an official said this amount was not approved per se from government budget and it was decided to explore all possible avenues for the foreign exchange through international lenders or grants like Gavi’s Covax programme.

It was felt vaccine arrangement in the new fiscal year be taken up on a monthly basis for the fact that $1bn foreign exchange could not be made available out of State Bank’s reserves in one-go.

For the current month, the ECC May 31 meeting had already approved $130m (equivalent to Rs20bn) for procuring the vaccine to meet requirement till June 30.

However, due to the increased target of vaccination by National Command and Operations Centre (NCOC), another $50m was required in addition to the already approved amount for the current month.

The ECC had also approved the additional funds of $70m for achieving the vaccination target for June.

G20 debt relief

The ECC also approved the request of Economic Affairs Division to proceed with the formal request for availing the G20 Debt Relief for the extended period, July- December 2021. The ECC also permitted the signing of MoUs with bilateral creditors in terms of the prevailing rules and regulations.

Under the third-phase (July-December 2021) of the debt relief service suspension, Pakistan is anticipating about $900m to $1bn relief. The IMF had estimated this debt relief for first two phases at $2.5bn, which is not going up to about $3.4bn after including the relief for the third phase.

The ECC also allowed the amendments to SRO 235 (1) 2020, 236 (1)/2020 and 237(1) 2020 of March 2020 issued by the Revenue Division to facilitate the Ministry of National Health Services, Regulation and Coordination for the import of Covid-19 medical and diagnostic equipment.

The technical supplementary grants approved by the ECC also included over three different grants of Rs3bn to Ministry of Federal Education, Rs1.4bn for the Finance Division, Rs350m for the Controller General of Accounts, Rs74.135m for meeting the marketing expenses of incentive scheme of home remittances. The chair directed that the impact analysis of this marketing scheme should be shared with the forum.

The ECC did not allow supplementary grants for group insurance requirements of government employees and expressed displeasure why Establishment Division had come up with such a demand at the close of the fiscal year.

Published in Dawn, June 10th, 2021