ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Friday decided to gift 40,000 tonnes of wheat to Afghanistan and allowed about $83 million international grant to Pakistan Poverty Alleviation Fund (PPAF) to pull thousands of poor people out of poverty.
The meeting presided over by Finance Minister Asad Umar approved a proposal of Ministry of National Food Security and Research for provision of 40,000 tonnes of wheat to Afghanistan as a gift.
The ECC also approved a proposal for provision of $82.6m funds as grant to PPAF for disbursement to 320,000 beneficiaries of Benazir Income Support Programme to help them graduate out of poverty.
A gift of 40,000 tonnes of wheat also approved for Afghanistan
The meeting was informed that the government had provided unconditional cash transfer (UCT) to BISP beneficiaries since its inception in 2008-09 and had so far disbursed a total of Rs618 billion to around 5.7m beneficiaries.
A proposal was floated during the tenure of the previous government to gradually graduate these beneficiaries out of poverty which announced various budgetary initiatives, including ‘BISP Beneficiary Graduation Programme’ in the 2017-18 federal budget.
Under the programme, selected beneficiaries of BISP would be provided with entrepreneurial training, along with one-time cash grant of Rs50,000 to start their own business and become productive members of the society and discontinue receiving Rs5,000 UCT grant.
In this regard, PPAF devised the “National Poverty Graduation Programme” (NPGP).
The International Fund for Agricultural Development (IFAD) had agreed to provide a loan amounting to $82.6m to the Government of Pakistan (GoP) for NPGP on highly concessional rates, free of interest with 0.75pc per annum service charges and a maturity period of 40 years, including 10 years as grace period.
The Economic Affairs Division has already signed Project Financing Agreement with IFAD on November 14, 2017.
As per agreement, the government shall make available the loan proceeds as grant to the poverty fund.
Moreover, the government through the PPAF shall provide $5m as counterpart financing for the programme from the already deployed ‘Prime Minister’s Interest Free Loan Scheme’.
Successful implementation of the programme is expected not only improve the livelihoods, and income generation capacity of the 320,000 poor households, but to also reduce the liability of the government from paying the UCT of Rs6bn per year to these BISP beneficiaries.
As per the terms of agreement with IFAD, the government is required to relend the ‘loan’ proceeds received from IFAD to the PPAF as a ‘grant’, in relaxation of the re-lending policy of the government that normally charged 12-14pc interest rate.
The ECC, therefore, approved relaxation in the relending policy for provision of $82.6m as grant to PPAF for BISP beneficiaries under the NPGP.
Published in Dawn, December 1st, 2018