ECC rolls over Rs352bn of Covid-related stimulus package
ISLAMABAD: The Economic Coordination Committee (ECC) on Wednesday rolled over Rs352 billion of the Covid-related Economic Stimulus Package to current fiscal to meet various expenditures, including procurement of vaccinations, and deferred approval of the five-year strategic trade policy framework.
The meeting of the ECC presided over by Finance Minister Shaukat Tarin also discussed the intervention price for cotton at a belated stage but could not take a final decision though the crop is at the last leg of sowing.
Apart from Mr Tarin, only two out of 14 ECC members attended the meeting.
The Finance Division tabled a summary to carry forward for FY2021-22 the unutilised cash component amounting to Rs352bn out of the Rs1.24 trillion Economic Stimulus Package announced in March 2020 at the start of Covid-19 to mitigate adverse socio-economic impact of the pandemic and to support the marginalised sections of the society.
Defers approval of strategic trade policy framework, cotton price
The funds were allocated under the package for entire duration of the Covid-19 pandemic irrespective of financial year, the finance ministry advocated and demanded rollover of the unutilised amounts. Foregoing in view, the ECC re-validated the amount of Rs352bn for FY 2021-22 for meeting related expenditures, including procurement of vaccine for Covid-19 during the ongoing fourth wave. The federal government is targeting to vaccinate at least 85 million people by December.
The ECC also took up a summary presented by the Ministry of Commerce on the Strategic Trade Policy Framework (STPF) for 2020-25 to enhance export competitiveness of Pakistan through a framework of policy interventions.
The finance minister raised questions about various considerations and directed that the factors related to a market-based realistic exchange rate must be incorporated under the proposed STPF 2020-25. He also called for including specific measures for encouraging foreign direct investment and consolidation of fragmented export industry in Pakistan.
Therefore, the ECC decided to review the draft STPF 2020-25 after having another consultative meeting with all relevant stakeholders and present an updated policy framework before the next committee meeting for approval.
The commerce ministry had projected 5.5 per cent to 8pc annual growth rate in exports during the five-year period under various assumptions thus putting the terminal year (2025) exports targets ranging between $29 to $40bn on the basis of new areas, products and markets.
The ECC also discussed the intervention price of cotton for FY 2021-22 suggested by a cotton price review committee at about Rs5,000 per 40-kg to promote cotton production and bring price stability in the domestic market by monitoring local market prices. The ECC deliberated over the recommendations and decided to hold another consultative session with all key stakeholders on board to finalise the recommendations and present the revised summary to the cabinet.
There have been tough conflicting views of the proponents of rural agriculturists and urban industrialists over the intervention price for more than two months now. The Ministry of National Food Security and Research (MNFSR) has been seeking Rs5,000 per 40kg intervention price for a limited cotton produce with the argument that the crop had given great output when it was supported. “Comparing intervention period with that of non-intervention period, it revealed that cotton area and yield has increased during TCP intervention period — 1998-2010 — and decreased during the period without intervention — 2011-2020,” according to the summary.
On the other hand, textile exporters are opposing the intervention price on the grounds that it would make Pakistani cotton expensive when compared with international market. The MNFSR suggested that intervention price even after the sowing encouraged farmers to use fertilisers and chemicals and received better results and vice versa.