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ECC re-validates Rs352b unutilised Economic Stimulus Package’s funds

ISLAMABAD – The Economic Coordination Committee (ECC) of Cabinet has re-validated the unutilised funds of Rs352 billion out of the Economic Stimulus Package amounting to Rs 1240 billion for FY 2021-22 for meeting related expenditures including procurement of vaccine for Covid-19.

The Finance Division tabled a summary in the ECC to carry forward for FY 2021-22, the unutilised cash component equal to Rs 352 billion out of the Economic Stimulus Package amounting to Rs 1240 billion (given in March 2020) to mitigate the adverse socio-economic impact of the corona virus pandemic and to support the marginalised sections of the society. The funds were allocated under the Economic Stimulus Package for the entire duration of the Covid-19 pandemic irrespective of the financial year. Foregoing in view, the ECC re-validated the amount of Rs 352 billion for the FY 2021-22 for meeting related expenditures including procurement of vaccine for Covid-19 (during the ongoing fourth wave) as the federal government aims to vaccinate at least 85 million by December 2021.

The government had not fully utilised the Prime Minister’s Relief-cum-Economic Support Package to absorb Covid-related shock with almost 30 per cent of the funds remained unutilised. Prime Minister Imran Khan in March last year had announced a stimulus package worth about Rs 1.2 trillion aimed at supporting the economy in absorbing the adverse impacts of the pandemic.  However, the official document of the ministry of finance showed that government had utilised only Rs 888 billion and left Rs352 billion unutilised.

The document showed that government had allocated Rs200 billion for daily-wagers but the actual disbursements remained at Rs16 billion, leaving Rs184 billion unspent.  Similarly, the government had allocated Rs50 billion for providing subsidised goods at the State-owned utility stores and the actual spending was just Rs10 billion.  Meanwhile, against Rs150 billion budget for BISP, the spending remained at Rs145 billion.  However, Rs100 billion meant for giving refunds to exporters was also not fully disbursed, as the government had given only Rs86 billion.  The prime minister also announced Rs 100 billion for the agriculture sector and small and medium enterprises and Rs33 billion remain unspent so far, according to the document.  The report showed that the government fully utilised Rs 280 billion against wheat procurement. It has also showed Rs70 billion relief in fuel prices. The government had also allocated Rs100 billion to provide temporary relief in electricity bills but the report showed disbursements remained at only Rs 56 billion.

Federal Minister for Finance and Revenue, Shaukat Fayyaz Ahmed Tarin, chaired a meeting of the ECC of the Cabinet (through a video link).  The ECC considered a summary presented by the Ministry of Commerce regarding Strategic Trade Policy Framework (STPF) for 2020-25 to enhance export competitiveness of Pakistan through a framework of policy interventions. The proposed STPF 2020-25 also includes a monitoring and implementation mechanism. The underlying rationale is to enhance exports as a national priority through collaborative and cohesive efforts.

While speaking on the occasion, the finance minister directed that the factors related to a market-based realistic exchange rate must be incorporated under the proposed STPF 2020-25. He further stressed to include specific measures for encouraging Foreign Direct Investment (FDI) and consolidation of fragmented export industry in Pakistan. After due deliberations, the committee decided to review the draft STPF 2020-25 after having another consultative meeting with all relevant stakeholders and present an updated policy framework before the next ECC for approval.

The Ministry of National Food Security and Research (NFS&R) presented a summary regarding intervention price for the cotton crop for FY 2021-22. The ECC had earlier constituted a committee, under the chairmanship of the minister for NFS&R, for presenting recommendations to promote cotton production and bring price stability in the domestic market by monitoring local market prices. The ECC deliberated over the recommendations by the Cotton Price Review Committee (CPRC) and it was decided that another consultative session would be held with all key stakeholders on board including M/O NFS&R, Finance Division and Commerce to finalise the recommendations and present the revised summary before cabinet.

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