ECC turns over Rs352bn of Covid-related improvement bundle

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The Economic Coordination Committee (ECC) on Wednesday rolled over Rs352 billion of the Covid-related Economic Stimulus Package to the current fiscal to satisfy various expenditures, including procurement of vaccinations, and deferred approval of the five-year strategic national trading policy framework.

The meeting of the ECC presided over by the minister of finance Shaukat Tarin also discussed the intervention price for cotton at a belated stage but couldn’t make a final judgment through 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 hold forward for FY2021-22 the unutilized cash component amounting to Rs352bn out of the Rs1.24 trillion Economic Stimulus Package announced in March 2020 at the beginning of Covid-19 to mitigate the adverse socio-economic impact of the pandemic and to support the marginalized sections of the society.

The funds were allocated under the package for the entire duration of the Covid-19 pandemic regardless of the fiscal year, the finance ministry advocated and demanded rollover of the unutilized amounts. Foregoing insight, the ECC re-validated the quantity of Rs352bn for FY 2021-22 for meeting-related expenditures, including procurement of vaccine for Covid-19 during the continued fourth wave. The federal is targeting to vaccinate a minimum of 85 million people by December.

The ECC also took up a summary presented by the Ministry of Commerce on the Strategic national trading policy Framework (STPF) for 2020-25 to reinforce the export competitiveness of Pakistan through a framework of policy interventions.

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The minister of finance raised questions on various considerations and directed that the factors associated with a market-based realistic rate of exchange must be incorporated under the proposed STPF 2020-25. He also involved including specific measures for encouraging foreign direct investment and consolidation of the 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 subsequent board meeting for approval.

The commerce ministry had projected a 5.5 percent to 8pc annual rate of growth 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 idea of latest 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 market cotton production and convey price stability within the domestic market by monitoring local market prices. The ECC deliberated over the recommendations and decided to carry another consultative session with all key stakeholders on board to finalize the recommendations and present the revised summary to the cupboard.

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There are tough conflicting views of the proponents of rural agriculturists and concrete industrialists over the intervention price for quite two months now. The Ministry of National Food Security and Research (MNFSR) has been seeking Rs5,000 per 40kg intervention price for limited cotton produce with the argument that the crop had given great output when it had been supported. “Comparing intervention period thereupon of non-intervention period, it revealed that cotton area and yield has increased during TCP intervention period — 1998-2010 — and decreased during the amount without intervention — 2011-2020,” consistent with the summary.

On the opposite hand, textile exporters are opposing the intervention price on the grounds that it might make Pakistani cotton expensive in comparison with the international market. The MNFSR suggested that intervention price even after the sowing encouraged farmers to use fertilizers and chemicals and received better results and the other way around.

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