ISLAMABAD: Amid calls by textile stakeholders for allowing cotton and yarn import from India, a meeting of the Economic Coordination Committee (ECC) of the Cabinet is expected to take up the issue on Wednesday along with additional power subsidy and reduction in some telecom charges.
Finance Minister Dr Abdul Hafeez Shaikh would preside over the ECC meeting after a gap of over two weeks amid his political engagements for Senate elections that he lost to Yousaf Raza Gilani.
A senior government official told Dawn that the import of cotton and yarn from central Asian republics was already on the agenda of the ECC meeting that could not meet last week. Since then the textile manufacturers and exporters have started printing appeals seeking lifting the ban on import of cotton yarn from India as well along with removal of customs duty.
Pakistan’s textile industry’s consumption varied between 12 and 16 million bales per annum but domestic production this year is estimated at about 7.7 million bales, leaving a shortfall of at least 5 million bales. The commerce ministry had proposed allowing duty-free import of cotton from CARs via land route through Afghanistan till June 2022. However, the Ministry of National Food Security and research had reservations over pest risk analysis tests.
The meeting will also take up a summary of the Power Division for about Rs115 billion supplementary grant for additional subsidy for the power sector during the current year. This is in line with an understanding reached with the International Monetary Fund (IMF) for containing the circular debt.
For the current fiscal year, the government had allocated about Rs140bn power sector subsidy in the budget which was later increased to Rs147bn. It later, however, transpired that there would still be a gap of about Rs177bn. After some tariff adjustments, the government has now estimated about Rs115bn would also be required to maintain uniform tariff in addition to earlier allocation of Rs147bn.
The ECC is also expected to consider a summary of the Ministry of Information Technology and Telecommunication seeking reduction in biometric charges and benchmarking of spectrum price despite resistance from National Database and Registration Authority (Nadra). The summary had been taken up with the prime minister regarding various proposals on biometric verification charges, benchmarking of spectrum fee in rupee instead of dollar, resolution of disputes over telecom licence renewal wherein it was directed that matter.
Nadra had strongly opposed the reduction in biometric verification charges while it was decided that any taxation matters be considered as part of the budgetary process.
The ECC is also expected to consider a summary of the Ministry of Industries and Production for provision of Rs2bn additional subsidy for the fertiliser sector – two fertiliser plants on Sui Northern Gas Company Ltd network – for production of about 700,000 tonnes of fertiliser.
Another item on the agenda is a summary of the Power Division that seeks to put on hold the payments under implementation of tariff reduction agreements reached with independent power producers (IPPs) set up under Power Policy 2002 till such time the National Accountability Bureau (NAB) gave final clean chit.
Published in Dawn, March 9th, 2021
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