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ECC approves Rs2.9 billion bailout package for PSM

Published Sep 07, 2013 11:09pm
The Economic Coordination Committee of the Cabinet Saturday, with Federal Minister for Finance Ishaq Dar in the chair, discussed a proposal for an interim relief for the Pakistan Steel Mills. – File Photo
The Economic Coordination Committee of the Cabinet Saturday, with Federal Minister for Finance Ishaq Dar in the chair, discussed a proposal for an interim relief for the Pakistan Steel Mills. – File Photo

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet Saturday approved a three-month bailout package of Rs2.9 billion for the Pakistan Steel Mills (PSM).

Rs1.5 billion will be released in September while Rs700 million each in October and November. This will include two-month salary of the workers.

The ECC, which met here with Federal Minister for Finance Ishaq Dar in the chair, discussed a proposal for an interim relief for the Pakistan Steel Mills and decided that the Chairman Board of Investment and the Ministry of Industries should come up with a proposal for long term solution of the problem in the next meeting.

The ECC also decided that the PSM would remain a public sector enterprise, by seeking a strategic partner with a minority stake to run its management.

The Governor State Bank of Pakistan informed the meeting that the SBP had received the first installment of US$550 million from the International Monitoring Fund, increasing the foreign exchange reserve to US$10.4 billion.

While reviewing the key economic indicators, reasons behind the inflation increase were analyzed by the ECC.

Expressing satisfaction over the sugar stocks of 2.229 million tons, the ECC directed the Trading Corporation of Pakistan (TCP) to purchase 100,000 MT to maintain its strategic reserves.

Similarly, the committee was told that presently the wheat stock was 7.043 tons compared to 6.750 tons in the corresponding period last year.

The government body expressed satisfaction that there were 85 days of oil reserves in the country, compared to 29 days in the corresponding period last year. This improvement, it noted, had come about as a result of clearance of circular debt by the government.

The meeting was informed that export in the month of July has increased by 9 per cent to US$2.62 billion.

Need for a comprehensive strategy to bring in quantum growth in exports of the country was also discussed as the exports during the last few years have been hovering around $25 billion annually.

The Finance Minister said that value addition, focus on non-conventional items and identifying of new markets were necessary for increase in the export.

It was decided to constitute a committee with Federal Minister Ahsan Iqbal as its chairman in that regard. The committee was tasked to submit its recommendations within a month.

The meeting expressed satisfaction over the increase in collection of revenues by the FBR by over 20 per cent in July-August 2013 as compared to the corresponding period last year.

The committee hoped that FBR would redouble its efforts to achieve the target of Rs2475 billion.

The meeting was informed that large scale manufacturing had shown an increase of 4.2 per cent. However, it expressed dissatisfaction over the negative growth in sectors like engineering products, automobiles, wood products, electronic and fertilizers.

Moreover, the Ministry of Industries was directed to examine the decrease of growth in those sectors and come up with concrete recommendations to improve them.