In a recent development, the Economic Coordination Committee (ECC) of the cabinet, led by Finance Minister Ishaq Dar, has approved electricity price increase and made significant decisions that will impact various sectors in Pakistan. Let’s delve into the key highlights of these decisions:
Electricity Price Increase for Karachi Consumers
The ECC has given the green light to electricity price increase for consumers in Karachi. This decision, while necessary for various reasons, will result in an approximate rise of Rs5 per unit, including taxes and charges.
Boosting Foreign Remittances and Supporting the Poorest
A substantial foreign remittances incentive package, amounting to Rs80 billion, has been approved by the ECC. This move aims to encourage and reward foreign remittances, bolstering the country’s economic stability. Furthermore, a Rs30 billion subsidy package has been granted to support the poorest customers of the Utility Stores Corporation (USC), addressing the needs of the most vulnerable segments of the population.
Rationalizing Tariffs for K-Electric Consumers
In a bid to ensure uniformity and fairness, the ECC has approved tariff rationalization for K-Electric (KE) consumers. Adjustments will be applied based on consumption during April, May, and June 2023. The incurred costs will be spread across three months – July, August, and September 2023 – resulting in an effective increase of Rs5 per unit for consumers.
Amendments to National Electricity Transmission Policy
To align with the directives of the Special Investment Facilitation Council (SIFC), the ECC has amended the national electricity transmission policy. As a result, two significant energy projects have been awarded to Gulf countries. These projects, which include 2,000 MVAR Reactive Compensation and 1,000 MVAR Battery Energy Storage System, fall under the category of ancillary services and contribute to strengthening the energy landscape.
Incentives and Measures for Strengthening Remittances
Recognizing the crucial role of remittances in Pakistan’s economy, the ECC has introduced a range of measures. A substantial incentive package of Rs79.5 billion has been set aside for commercial banks to promote and facilitate home remittances. Additionally, telegraphic transfer charges have been revised, with a new rate of 30 riyals per $100. These changes are expected to enhance remittance inflows.
Promoting Remittances through Innovative Initiatives
To encourage remittance inflows further, the ECC has approved the launch of a lucky draw scheme. This scheme aims to incentivize individuals to send remittances and contribute to the country’s economic growth. Alongside this, the discontinuation of the M-Wallet remittance scheme has been sanctioned.
Addressing Agricultural Challenges and Electricity Procurement
The ECC has taken note of challenges faced in the agricultural sector, particularly related to wheat damaged by rains and floods. In another important move, the committee has approved amendments to an electricity procurement contract with Iran, securing the supply of 104 megawatts of electricity and negotiating terms for additional supply.
Enhancing Social Welfare and Financial Support
Lastly, the ECC has shown its commitment to social welfare by approving a Rs3 billion supplementary grant. This grant will facilitate the Prime Minister’s Health Insurance Scheme for media workers, journalists, and artists. Additionally, the Film Finance Fund will be provided to the information and broadcasting ministry, fostering growth and development in the film industry.
These decisions, made by the ECC, reflect a multi-faceted approach to address key challenges and promote growth across various sectors in Pakistan. The government’s efforts to balance economic stability, social welfare, and infrastructure development remain at the forefront of these initiatives.
The Economic Coordination Committee (ECC) of Pakistan’s cabinet, led by Finance Minister Ishaq Dar, has made several significant decisions aimed at addressing various economic and social challenges.
These decisions include approving an electricity price increase for Karachi consumers, introducing incentive packages to boost foreign remittances and support the poorest, rationalizing tariffs for K-Electric customers, and amending the national electricity transmission policy to facilitate energy projects in collaboration with Gulf countries.
The ECC also focused on enhancing remittance inflows through revised transfer charges and innovative schemes. Additionally, efforts were made to address agricultural issues, secure electricity procurement from Iran, and provide financial support for social welfare initiatives.
These decisions collectively showcase the government’s commitment to fostering economic stability, promoting social welfare, and driving growth across sectors in the country.