ISLAMABAD        -      The government on Thursday has approved to increase the power tariff by Rs0.11 per unit and wheat support price to Rs1365 per 40 kg in order to provide incentive for the growers.

The Economic Coordination Committee (ECC) of the Cabinet has taken the decision to increase the power tariff and wheat support price. The ECC approved proposal for notifying the NEPRA approved quarterly adjustment of 15 paisa per unit after incorporating an additional charge of 11 paisa per unit for maintaining uniform tariff on all categories of consumers except lifeline and domestic consumers.

The increase coming into effect on 1st December 2019 for the next twelve-monthly billing cycle would not be applicable to nearly 20 million consumers using up to 300 units per month, out of the total 30 million consumers while 600,000 of the remaining one million consumers would only pay 7 paisa per unit as a result of this increase.

  The ECC also constituted a committee headed by Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh and comprising Minister of National Food Security and Research Makhdoom Khusro Bakhtiar, Prime Minister’s Advisor on Commerce and Investment, Abdul Razak Dawood and Special Assistant to Prime Minister on Petroleum Nadeem Babar to examine the current framework of determining power tariff and make it more simple in line with the practice in mature markets.

The ECC has also taken the decision to increase wheat support price on the second consecutive meetings that held yesterday. The top economic decisions making body of the country few weeks back had increased the wheat support price up to Rs1350 per 40 kg from Rs1300 per 40 kg.  However, farmers’ community had termed the proposed increase insignificant due to high inflation and an increase in their cost of production. On Wednesday, National Food Security and Research Minister Makhdum Khusro Bakhtyar came up with a proposal to further increase wheat support price to Rs1,400 per 40 kg. He was not happy with a Rs50 per 40kg increase approved by ECC about two weeks ago because the relevant authorities had worked out production cost at Rs1,350 per 40kg for Punjab — practically no incentive for the grower.

In the latest development, the ECC on Thursday has decided to enhance the wheat support price to Rs1365 per 40 kg.

Earlier, the Ministry of National Food Security & Research briefed the ECC on the feedback received from various farmers’ associations as well as different government forums and requested for fixing the minimum support price of wheat at Rs1400 per 40 kg.

The ECC deliberated on the proposal at length and in view of the discussion and input regarding the impact of any further increase in wheat price on food inflation and financial impact on the commodity stock operations, decided to raise the minimum support price of wheat to Rs 1365 per 40 kg. The ECC also viewed a presentation from the Ministry of Finance on the government commodity operations which had over the years resulted in Rs757 billion as total debt and liabilities and recommendations for reducing the debt.

The ECC also considered a set of proposals from the Ministry of Energy (Power Division) for risk mitigation post privatisation of National Power Parks Management Company, especially the impact on fuel basket price due to non or reduced off take of 66 per cent generation under the PPA till year 2024 and cost of diversion of Regasified Liquefied Natural Gas (RLNG) to other sectors with workable options to mitigate the risk.

The ECC discussed the proposals in details and approved them with a proviso that any other option that could be considered as part of the mitigation plan by the Power Division could also be taken into account and approved, if found suitable, by the ECC.  

To a proposal by the Ministry of Industries and Production, the ECC constituted an inter-ministerial committee under the chairmanship of Minister Planning, Development and Reforms and comprising Adviser to Prime Minister on Industries and Production, Special Assistant to Prime Minister on Petroleum, Secretary Finance, Secretary Industries and Production and Chairman FBR for preparation of a policy framework for promotion of steel and iron in the country through foreign direct investment.

      The ECC also considered a proposal by the Ministry of Communications that all cash development loans and foreign loans, whether direct or relent, including interest accumulated thereon, received up to June 30, 2019 by the National Highway Authority be converted into government grant or the Government of Pakistan may either “write-off” the said loans while for future, all PSDP allocations including relent/direct loans, both rupee and foreign exchange component i.e. for non-commercially viable projects and for strategic/defence roads to NHA may also be provided as government grant. The proposal also sought the CDL may be advanced only for commercially feasible projects on which Finance Division and NHA mutually agree regarding the terms and conditions of the loan and its repayment or these viable projects may be undertaken by NHA in PPP/BOT mode of financing.

The ECC discussed the proposals and in view of input from the members constituted a committee comprising Minister for Planning, Development and Reforms, Secretary Finance, Secretary Communications, Secretary Economic Affairs Division and Deputy Chairman Planning Division to examine the proposals and submit their recommendations to the ECC.

  The ECC also took up a proposal from the Ministry of Industries and Production for a technical supplementary grant of Rs6 billion to the Utility Stores Corporation (USC) for subsidy and procurement of essential commodities, including flour, ghee/oil, rice, sugar and pulses, to be sold at a fair price to the poor segment of the society. The ECC discussed the issue in detail and in view of input from the members, asked the Utility Stores Corporation to prepare within the next few days a practical and comprehensive mechanism involving use of information technology to ensure the disbursement of specific food items to the poorest of the poor. The ECC also constituted a committee comprising Adviser to Prime Minister on Industries and Production, Governor State Bank of Pakistan, Benazir Income Support Programme Chairperson and representatives from NADRA and PPRA to advise and assist the USC to firm up their proposals and present them to ECC.