Substantial rise in essential items’ prices okayed
17
• ECC allows transfer of marine assets to PNSC subsidiary
• Orders import of 200,000 tonnes of sugar
• Approves procurement of 200,000 cotton bales by TCP
ISLAMABAD: The government on Friday ordered import of 200,000 tonnes of sugar to build strategic reserves and increased the prices of wheat flour, ghee and sugar by up to 53pc for sale through the Utility Stores Corporation (USC).
The decisions were taken at a meeting of the federal cabinet’s Economic Coordination Committee (ECC), which was presided over by Finance Minister Shaukat Tarin and was attended by only two other members of the 14-member ECC.
The ECC also allowed import of 200,000 bales of cotton to meet requirements of the textile industry and made about Rs116 billion non-cash book adjustment in various public sector power producers to contain circular debt.
On the recommendation of the Ministry of Industries and Production (MOIP), the ECC increased the price of ghee at USC outlets by almost 53pc from Rs170 to Rs260 per kg and the price of wheat flour by about 19pc to Rs950 per 20kg bag from its existing rate of Rs800.
Likewise, sugar price was raised from the existing rate of Rs68 to Rs85 per kg, indicating an increase of 25pc.
An official statement said the prices were revised owing to an increasing gap between the subsidised prices offered by the USC and the prevailing market prices. The committee “approved revision in prices of three essential commodities to rationalise provision of subsidies by the USC”, it reasoned.
The committee also approved another proposal of the MOIP for importing 200,000 tonnes of sugar to build strategic reserves and minimise the role of speculative elements in the domestic market. In case of need, more reserves would be built through import, the ECC decided.
Kamyab Pakistan Programme
The ECC approved Kamyab Pakistan Programme (KPP) envisaging provision of micro-loans to entrepreneurs and farmers under Kamyab Karobar and Kamyab Kissan schemes, respectively. The scheme shall also provide low-cost housing loans through Naya Pakistan Housing Development Authority.
The meeting expressed satisfaction over the “bottom-up approach” of the KPP for reducing poverty. The finance minister said consultative process was followed in working out modalities of the KPP ensuring that all relevant stakeholders were on board and micro-loans shall be disbursed as per given criteria.
The ECC also approved a summary presented by Ministry of Commerce regarding the elimination of documents attestation fee for goods imported from Kenya, noting that the non-tariff measure increased the cost of business and transaction time. The move is expected to facilitate trade between the two countries.
Power sector loans
The ECC approved a power division’s summary for non-cash settlement of power sector relent loans against Rs116 billion subsidies payable by the government. The power division had suggested book adjustments of Rs97.35bn against liabilities of National Transmission and Dispatch Company (NTDC), Wapda, Chashma plants of Pakistan Atomic Energy Commission (PAEC), Neelum-Jhelum Hydropower Company (NJHPCL).
The meeting was informed that the four entities have Rs273.2bn of liabilities of relent loans as of May 30, 2021.
However, the receivables of these entities amounting to Rs347bn as of June 30, 2020 were outstanding against Central Power Purchasing Agency (CPPA) – another public sector entity.
The power division recommended that payables of the public sector power producers should be settled against their receivables from the CPPA and similar amounts of unpaid subsidies, payable to Discos through CPPA be settled against the above relent loans without involving any cash.
AJK telecom
The ECC approved the policy directives related to auction of Next Generation Mobile Services (NGMS) in Azad Jammu and Kashmir (AJK) drafted by the Ministry of Information Technology and Telecommunication.
This is the first time that the NGMS will be auctioned in AJK with the expectation to improve mobile broadband services in the region.
The ECC also approved a summary of the Ministry of Maritime Affairs for award of Rs86.6 million engineering consultancy service contract to upgrade Port Qasim Authority (PQA).
Marine assets
The ECC also allowed the PQA, Karachi Port Trust (KPT) and Gwadar Port Authority (GPA) Boards to transfer their marine assets to the Pakistan Marine and Shipping Services Company Private Limited (PMSSC), a subsidiary of Pakistan National Shipping Corporation (PNSC).
The maximum rates to be charged by the PMSSC from the public sector ports and harbours shall be determined from time to time by the Ministry of Maritime Affairs through gazette notifications.
Cotton import, price review
The ECC also approved procurement of 200,000 cotton bales by Trading Corporation of Pakistan (TCP) “to promote cotton production and bring stability in the domestic market”. The meeting constituted a Cotton Price Review Committee (CPRC) with a mandate to review market price and propose intervention on a fortnightly basis.
The ECC approved an amendment to its earlier decision of February 19 regarding the fiscal package for agriculture in the wake of Covid-19. The package offered subsidy on DAP at the rate of Rs1,500 per acre for cotton and rice crops during the Kharif season this year. Farmers can now avail the subsidy on any phospharic fertiliser according to their choice after the amendment.
Published in Dawn, July 17th, 2021
