ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved subsidised electricity and gas rates for export-oriented sectors and rejected a move to impose a ban on export of potatoes.
The meeting, presided over by Adviser to PM on Finance and Revenue Dr Abdul Hafeez Shaikh also constituted a committee on next generation cellular services spectrum and made changes to terms of subsidy for the Naya Pakistan Housing Authority.
The meeting took up a recent understanding of an inter-ministerial committee with export sectors and approved the continuation of concessionary rates of electricity and RLNG for export-oriented sectors (erstwhile zero-rated sectors).
Under the decision, the power companies would provide electricity to five export-oriented sectors at the rate of 7.5 cents (all inclusive) per unit (kwh) for July and August and then at 9 cents (all inclusive) per unit for rest of the financial year 2020-21. This would have a financial impact of Rs13 billion on budget.
Rejects proposal to ban potato export
Also, the mix of local and RLNG would also be provided to these sectors at a fixed rate of $6.5 per million British thermal unit. This is expected to have no additional financial impact on budget given the fact that actual cost of even imported gas has been around $5 per mmBtu, resulting in cash surplus that would be adjusted against any future increase in LNG cost.
The ECC also decided that the Finance Division will continue with the existing guarantee of Rs31bn for the power sector through the Power Holding Company (PHL).
The meeting also constituted an advisory committee led by Dr Hafeez Shaikh for the release of the Next Generation Mobile Services (NGMS) spectrum and the auction for unsold spectrum in the country for improvement of mobile broadband services.
The committee will also comprise of federal minister for information technology and telecommunication, adviser to PM on commerce, minister for industries and production, federal minister for planning, development and special initiatives besides other members from intelligence and security agencies to avoid any future controversies.
The committee would examine and evaluate the market assessment report and recommendations of the Pakistan Telecommunication Authority (PTA) for the release of maximum NGMS spectrum in the country.
The committee will also examine and finalise policy directives for the federal government for the release of NGMS spectrum and then oversee the release process to be conducted by the PTA.
The ECC also approved an amendment in the minutes of an earlier decision on July 22 related to subsidy of the Naya Pakistan Housing and Development Authority (NPHDA). The amended and approved decision states “approval for allocation of Rs33.095bn on account of 10 year markup subsidy on loans with tenor up to 20 years with supplementary grant of Rs4.774bn on account of markup payment during the current financial year (FY 2020-21).”
Under the original decision as announced by the prime minister, the mark up subsidy for housing finance worked out by the NPHDA involved special incentives for housing and construction sector for revival of economic activities amid Covid-19 pandemic. Markup subsidy shall be provided for 10 years on bank financing.
Under the scheme, borrowers could avail loans for 10, 15 or 20 years but the government would subsidise interest for 10-year loans only.
Published in Dawn, September 10th, 2020