ISLAMABAD: Prime Minister Imran Khan recently announced in a Press Conference that a rescue and stimulus package worth about Rs1.13 trillion would be launched. The package aimed at supporting various sectors of society and the economy in absorbing the adverse impacts of coronavirus pandemic.
Speaking at a news conference, the prime minister gave details of the multi-sectoral package put together by the federal government and said the provinces had also been asked to chipin with their funds to support troubled sections of economy.
At the same time, Imran said the State Bank of Pakistan (SBP) was considering reducing its key policy rate. It was cut by 150 basis points to 11 per cent soon after the premier`s televised session came to an end.
Giving details of the stimulus package, Mr Khan said the government had decided to allocate Rs200 billion for the labour force and was talking to the provincial governments to make available their resources. He did not give details, but said discussions with businesspeople were in progress over how to use some of the funds so that they do not send their workforce on leave. To protect the export sector from global challenges, the prime minister announced Rs100bn payment of refunds immediately to improve cash flows for payments to labour force.
Secondly, he said the SBP had been asked to engage with banking industry for deferred payment of principal and interests on bankloans.
Another Rs100bn was approved for deferred payment of loans for small and medium enterprises (SMEs) and agriculture and concessional loans to ensure their input costs do not go up.
Also, Rs150bn was earmarked to support vulnerable families by increasing their stipend from Rs2,000 to Rs3,000 per month for four months. The prime minister said the provinces had also been asked to come up with their support plans so that the weak segments ofsociety could be further helped out. He said the network of panagahs (shelter homes) for the jobless and poor was being expanded so that the unemployed and weak could have meal and shelter.
Likewise, Mr Khan said the Utility Stores Corporation would be given additional Rs50bn to ensure it did not run out of essential commodities and keep providing them at affordable rates to the middle class.
The Prime Minister also announced Rs15 per litre reduction in the prices of petrol, diesel and kerosene with imme diate effect, saying this relief worked out to Rs75bn. Responding to an observation that reduction in oil prices did not commensurate with the price cut in the international market, PM`s special assistant Nadeem Babar said the impact of global prices usually had a lag of about 45 days and if the trend continued prices would be brought further down.
Mr Khan announced that payment of electricity and gas bills would be allowed in three instalments. The facility would be limited to those with monthly electricity consumption of less than 300 units and less than Rs 2,000 per month of gas bills. He said the facility covered about 75pc of power consumers and 81pc of gas consumers. The Prime Minister said Rs50bn had been set aside to provide financial support to medical staff and to hire more staff. In addition, he said the Federal Board of Revenue had been directed to completely exempt or reduce taxes on imported essential food items like pulses.
An additional amount of Rs25bn would be given to the National Disaster Management Authority to beef up medical and rescue equipment like testing kits and ventilators.
In addition, Mr Khan said about Rs100bn would be set aside for a fund aimed to make arrangements for future emergencies. He said a separate stimulus package for construction industry would be announced in a couple of days.
This would be an ‘unprecedented package’ because the construction industry not only would create job opportunities but also carry a host of industry along and boost economy.
Responding to a question about one of the highest interest rates in the world, the prime minister said there had been continuous discussions on the matter but there were also its repercussions and hence there was no straightforward answer to rate cut which could be discussed in public. However, he said every-thing was moving in the right direction and exports had started to pick-up before the coronavirus challenge emerged.