The Cabinet’s Economic Coordination Committee (ECC), chaired by Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb, has approved 16 key summaries aimed at bolstering economic stability, addressing inflation, and fostering sustainable growth. The decisions include cost-sharing of subsidies on imported urea, creating a pension fund, and expanding the Prime Minister’s Youth Loan Scheme.
Key Approvals and Initiatives
The ECC approved the sharing of subsidies on imported urea on a 50:50 basis between the federal and provincial governments. To ensure the smooth availability of urea for agricultural needs, Rs10 billion was released to the Ministry of Commerce for settling outstanding dues. Provinces were directed to fulfill their share of subsidy payments to ensure equitable cost-sharing.
In a significant move, the ECC approved the creation of a pension fund through a Non-Banking Finance Company (NBFC) regulated by the Securities and Exchange Commission of Pakistan (SECP). Rs30 million was allocated as seed money for the NBFC, with an additional Rs1 million approved for incorporation expenses.
The committee also approved the inclusion of a new tier (Tier 4) in the Prime Minister’s Youth Business and Agriculture Loan Scheme (PMYBALS). Under this tier, all loans will be term loans with a 0% end-user rate on a first-loss basis. The scheme has a budgetary allocation of Rs8.6 billion for the current fiscal year.
Support for Development Projects
The ECC approved the establishment of the Siah Dik Copper Project in Chagai, Balochistan, and declared the Saindak Export Processing Zone (EPZ) as a Private Export Processing Zone. This decision aims to enhance the development and export potential of the mineral sector in the region.
Additionally, Rs2 billion was approved for the Digital Economy Enhancement Project (DEEP) under NADRA, while Rs21.25 million was allocated to the Islamabad High Court for repair and maintenance of its buildings. The ECC also approved a restructuring plan for Pakistan Revenue Automation Limited (PRAL) and allocated Rs3.7 billion for its implementation.
To support critical infrastructure projects, the ECC approved Rs10 billion in rupee cover for the Water Infrastructure Project (WIF) and the Flood Impact Infrastructure Project (FIIP), funded by the Asian Development Bank and the World Bank, respectively.
Economic Progress and Inflation Control
During the meeting, Finance Minister Aurangzeb highlighted the government’s efforts to stabilize the economy and ensure sustainable growth. He noted a significant drop in the Consumer Price Index (CPI) to 4.9% in November 2024, the lowest level since April 2018. This decline reflects the government’s success in managing inflationary pressures and stabilizing prices of essential commodities.
The ECC was briefed on the reduction in prices of key goods, including wheat flour, diesel, petrol, sugar, and pulses. For instance, the price of chicken dropped by Rs49 per kg, gram pulse by Rs31 per kg, and mash pulse by Rs20 per kg over the past four weeks. The finance minister directed the National Price Monitoring Committee and provincial governments to ensure a steady supply of essential items and address undue price hikes.
Commitment to Economic Growth
The finance minister emphasized the government’s commitment to maintaining the positive trajectory of the economy. He highlighted the importance of public-private partnerships, economic diversification, and investments in agriculture, manufacturing, and infrastructure. The ECC reaffirmed its dedication to ongoing reforms and stabilization measures to improve living standards and create jobs.
