ISLAMABAD: The Economic Coordination Committee (ECC) on Wednesday approved a multi-billion agriculture package to provide the farmers with subsidy on fertilizers, cotton seed and white fly pesticides; reduce bank markup on agricultural loans, besides giving sales tax subsidy on locally manufactured tractors.
The ECC meeting was chaired by Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh.
The agriculture package is the part of the Rs100 billion funds earmarked for the Small and Medium Enterprises (SMEs) and the agriculture sector under the Rs1,200 billion coronavirus relief package, said a statement issued by the finance ministry.
Under the agriculture package, as prepared by Ministry of NFS&R in consultation with the stakeholders, subsidy to the tune of approximately Rs37 billion would be offered to farmers on the purchase of fertilizers.
The amount would include a subsidy of Rs925 per bag on DAP and other phosphatic fertilizers and Rs243 per bag on urea and other nitrogen fertilizers.
The ECC was told that the estimated urea offtake would be around 3.04 million tonnes while DAP was estimated at 0.95 million tonnes for the Kharif season.
The subsidy scheme would be implemented by the provinces and the amount would be disbursed through scratch card scheme already being implemented by the Punjab government.
The committee was informed that the fertilizer share in cost of production for major crops was around 10pc to 15pc and the provision of subsidy would reduce cost of production for farmers and increase their affordability to adopt the recommended level of fertilizer nutrient use and best agricultural management practices.
Similarly, under the agriculture package, reduction in markup of agriculture loans to farmers at the total cost of Rs8.8 billion and subsidy on cotton seed at a cost of Rs2.3 billion and white fly pesticides at Rs6 billion were approved.
The package would also include Rs2.5 billion subsidy on sales tax on the locally-manufactured tractors for a period of one year.
Earlier, the ECC discussed various features of agriculture relief package in detail and lauded the efforts of the Ministry of NFS&R for preparing a comprehensive package for farmers.
However, the ECC called for inclusion of other banks along with ZTBL in the scheme to enhance the outreach of farmers with focus on subsistence farmers with a land holding of 12.5 acres.
It was also suggested that since markup had been reduced by the State Bank of Pakistan, the interest rates used in the proposal could also be rationalized accordingly.
The ECC also called for the implementation mechanism, especially through the scratch card system, to be monitored carefully to ensure that the actual beneficiaries of package were genuine farmers.
It was also pointed out that since with the provision of subsidy on fertilizers demand for the fertilizers might increase, the same had to be communicated to the Ministry of Industries and Production in time to make arrangements accordingly.
The Minister of NFS&R assured that the regular offtake of fertilizer was being subsidised, however, any increase would be communicated to the relevant ministry.
During the meeting, the ECC also approved a proposal by the Poverty Alleviation & Social Safety Division for disbursement of the Special Relief Package for population living along the Line of Control in a single installment of Rs12,000 for six months from 1st January to 30th June 2020, while from July onwards, LoC families would be disbursed monthly installments of Rs2,000 each till 31st December 2020.
The ECC also took up different proposals for technical supplementary grants by various divisions and approved one proposal by the Defence Division for technical supplementary grant of Rs16.6 billion. The supplementary grant would be utilised to meet the expenses on petroleum, utilities and medical stores maintained by the Defence Services. In addition, it approved a Finance Division proposal for a technical supplementary grant of Rs288 million for payment of salaries to the employees of Pakistan Machine Tool Factory for the period from October 2019 to June 2020.
The committee also approved a proposal by the Ministry of Law and Justice for a technical supplementary grant of Rs40 million for the operating expenditures of the Federal Judicial Academy
Meanwhile, the ECC took up a proposal by the Ministry of Industries and Production regarding the human resource rationalization of Pakistan Steel Mills workforce at a cost of Rs18.74 billion, to be paid for retirements and termination dues of over 8,000 of 9,000 PSM employees.
The committee discussed the proposal in detail and asked the Ministry of Industries and Production to re-work the scheme in consultation with the PSM management to extend its scope to maximum number of PSM employees and bring it back to the committee.
The ECC also discussed the Mobile Device Manufacturing Policy as proposed by the Ministry of Industries and Production.
The objectives of the policy are technology acquisition and localization of mobile devices through local investment, joint ventures, foreign direct investment; creation of 200,000 direct and indirect jobs, price reduction for consumers, increase in digitization through supporting 4G/5G technologies, development of efficient manufacturing eco-system, exports of competitively manufactured handsets and achievement of security objectives.
The ECC discussed various components of the policy and approved it in-principle with instructions to the ministry to further fine tune its various features and incentives for promotion of localization and research & development, leading to export of mobile phones.
Moreover, the committee considered and approved a proposal by the Ministry of National Food Security and Research for release of 35,000 metric tonnes of wheat from the PASSCO to the Azad Jammu Kashmir government at a cost of Rs1.52 billion, including cost of wheat and incidental charges, to be paid 50pc by the federal government from the stimulus package announced to fight against COVID-19.