Govt Spending Rs1.25 Trillion To Address Covid-19 Challenges: Hafeez Shaikh
Muhammad Irfan 5 days ago Wed 25th March 2020 | 11:33 PM
Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh on Wednesday said the government was spending Rs 1.25 trillion to overcome the Covid-19 challenge, besides initiating negotiations with the International Monetary Fund (IMF) for an additional grant of $1.4 bln on fast-track basis
ISLAMABAD, (UrduPoint / Pakistan Point News - 25th Mar, 2020 ):Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh on Wednesday said the government was spending Rs 1.25 trillion to overcome the Covid-19 challenge, besides initiating negotiations with the International Monetary Fund (IMF) for an additional grant of $1.4 bln on fast-track basis.
Rs1.25 trillion would be spent through a multi-sectoral relief package to address the challenges arisen due to the outbreak Covid-19 (coronavirus), he said while addressing a press conference.
He was flanked by Advisor to Prime Minister on Commerce, Textile and Industry Razak Dawood, Federal Minister for Economic Affairs Hammad Azhar, Special Assistant to the PM on Information and Broadcasting Dr Firdous Ashiq Awan and Special Assistant to the PM on Petroleum Nadeem Babar.
Hafeez Shaikh said the main objective of the package was to provide immediate relief to those who had been affected by the pandemic. Out of Rs 1.25 trillion, Rs 200 billion would be spent for providing relief to the daily-wagers and labourers by disbursing Rs 3,000 each per month among them in coordination with the business community and provincial governments.
The advisor said the package also included Rs 100 billion for the industrialists and exporters, which would help resolve their liquidity issues. They would be paid refunds, while payment of interest on loans would be deferred.
For the agriculture and SMEs (small and medium enterprises) sector, he said Rs100 billion would be spent for deferment of their loans, concessional loans and underwriting by the government for the creditor subsidy. The fertilizer industry would be subsidized, which would eventually reduce its prices and facilitate the farming community.
The advisor said Rs1,450 billion would be spent to provide relief to around 12 million vulnerable people by providing them Rs 3,000 per month. Earlier the government was providing relief to around 5 million whereas 7 million more had been included in the net, keeping in view the effects of coronavirus.
In addition, he said, the government was also expanding shelter homes (Panagah) project to provide immediate relief to the very low income people.
The advisor said Rs 50 billion would be given to the Utility Stores Corporation (USC) to provide five basic edible commodities, including flour, pulses, sugar and Ghee, on subsidized rates.
He said the government intended to spend Rs 280 billion to procure 8.2 million tons of wheat during the current season, which would help keep the inflation in check.
He said the reduction of oil prices was also part of the relief package. The prices of per liter petrol, diesel, kerosene, and light diesel oil had been reduced by Rs 15 each. The oil prices would not move upwards during the next four months, rather there were possibilities that the same might go further down.
The advisor said Rs 36 billion (quantum relief) had been provided on electricity bills of upto 300 units per month and Rs 2,000 gas bills in three monthly installments.
In addition, Rs15 billion would be incurred on tax break on health and food supplies while Rs100 billion would be provided as Residual/Energy Fund and Rs 25 billion would be provided to the National Disaster Management Authority (NDMA).
Hafeez Shaikh said the pace of spending through the Public Sector Development Programme (PSDP) would be further enhanced to generate overall economic activity whereas efforts were also being made for funds mobilization.
He said the country's economy was moving in the right direction as pointed out by economic indicators. The exports were on the rise whereas the current account deficit had also reduced from $20 billion to just $3 billion.
Likewise, he added, the government paid back loans of Rs 4,000 billion whereas the revenue collection had also witnessed 17 percent increase during the first eight months and foreign exchange reserves held by the State Bank of Pakistan risen by $5 billion during the period.
He said the primary balance had remained positive, which was rarely witnessed by Pakistan's economy in the past.
He said the Covid-9 situation had put the economy on challenging path as it would not only affect the exports but would slow down domestic economic activities and thereby reduce tax collection.
He said in the situation, the Federation and the provinces would work in collaboration and adopt a united strategy to come out the crisis and lead the country towards progress and development.
Hafeez Shaikh said in view of the evolving situation due to the spread of coronavirus (COVID-19), the government had initiated negotiations with the International Monetary Fund (IMF) for an additional grant of $1.4 billion on fast-track basis.
The government's financial team had made a comprehensive funds mobilization strategy for acquiring $ 1 billion from the World Bank (WB) and $ 3.5 million from the Asian Development Bank, besides early release of $ 900 million earmarked by the latter for different projects, he said while addressing a press conference, he said.
The adviser said the $1.4 billion grant would be in line with the previous programme Pakistan had with the fund, which would be disbursed at the earliest.
Minister Hammad Azhar said the government was fully focused and committed to facilitate the people in the critical situation.
The provision of medical facilities and food to the people was the topmost priority of the government and for that the government would pursue the WB and the ADB to release their aid amounting to $600 million on different counts on fast track basis, he added.
However, all the international financial institutions would be engaged for economic assistance when the coronavirus had been overcome, he said.
Hammad said,"We are also in coordination with Japan Intentional Cooperation Agency (JICA) to get assistance for providing facilities to the people in current situation." He said the government would provide facilities to the business community for continuing business activities sin the country.
Adviser on Commerce Abdul Razak Dawood said it was the government's priority government to save the domestic businesses, including Small and Medium Enterprises (SMEs), retailers and labour.
SAPM Dr Firdous Ashiq Awan said the media had been playing an important role in the current crisis and the government would take all necessary safety measures to protect the lives of journalists.