ISLAMABAD: The Economic Coordination Committee of the Cabinet (ECC) on Monday approved the inclusion of transmission line and ancillary services of the power sector for attracting multibillion dollars investment from the Gulf region and other countries through the Special Investment Facilitation Council (SIFC), purchasing 104 MW electricity from Iran and fixed Rs 3 billion for health insurance of journalists and uniform tariff for KE consumers.
The ECC also approved a summary for the allocation of Rs 29 billion for subsidy through the Utility Stores Corporation of Pakistan. The ECC approved a revision in the home remittances incentive scheme. The ECC was informed that the remittances dropped in the last financial year to $27 billion against $31 billion in 2021-22 so the SBP proposed a jacking-up incentive scheme for boosting up remittances from abroad. The existing reimbursement rate under the TT Charges Scheme is 20 SAR/100 USD transaction. The SBP has proposed that the rate may be increased to 30 SAR/100 USD transactions.
The rationale behind this proposal is the global increase in the cost of doing business wherein the raised transaction cost is passed to the migrant senders that serves as a deterrent to remittance inflows through formal channels. Further, this scheme was discontinued for Saudi Arabia during Covid in 2020. The SBP has proposed that now the scheme may be reinstated for the KSA corridor.
Marketing incentive scheme for promotion of home remittances: The scheme was launched in FY 2023-24 to incentivize financial institutions for carrying out their marketing/outreach activities for the promotion of home remittances. The SBP has proposed that in view of good take off, the scheme may be made permanent like other schemes and the rate of performance based cash incentive to the FIs may be revised from Rs 0.50 to Rs 1/incremental USD for growth up to 5% over the previous year; Rs 2/incremental USD for growth exceeding 5% and upto 10% over previous year, which earlier was Rs 0.75. Moreover, for growth exceeding 10% from the previous year cash incentive of Rs 3/incremental USD is proposed, which was Rs 1 over 15% growth earlier.
Sohni Dharti Remittance Programme: This scheme incentivizes inflowing remittance through formal channels by providing redeeming points to the remitters in collaboration with the Participating Public Sector Enterprises (PPSEs). The SBP has proposed that two additional avenues; 1B111, a bill payment facility, and PayPak Card, a Pakistani Debit Card, for spending redeemed points may be included in the SDRP. Further, to reap benefits of the aforementioned features, a settlement account is also required to be opened. Currently, there are three categories of remitters under SDRP (Green, Gold and Platinum) corresponding to the amount remitted by them ranging from $10,000 to $30,000 and above respectively. A new Diamond category is proposed to be included for the remitters of more than $50,000.
Incentive schemes for companies in interbank market: This scheme was launched in February 2022 to incentivize ECs with Rs 1/USD upon 100% surrender in interbank market. The prime aim of the scheme was to divert the access liquidity available in open market, owing to Covid 19 restrictions, to interbank market. Now the SBP assesses a liquidity constraint in the open market and has proposed that the SBP may be empowered to decide the minimum surrendering requirement for exchange companies in interbank market at the same rate of incentive.
Lucky Draw Scheme: This is a new initiative proposed by the SBP to incentivize remitters for sending remittance through formal channels and winning cash prizes. The SBP has requested a budgetary allocation of Rs 20.5 billion for CFY. However, Rs 2.415 billion have been allocated. Modalities of the scheme including international partners, marketing and operational costs, etc. will be determined by the SBP under intimation to the Finance Division (Annex-VI).
M-Wallet Scheme: This scheme was launched in 2018 providing an incentive of Rs 2/USD sent by the remitter through the Mobile Wallet account. The scheme, however, could not gain traction; therefore, the SBP has proposed that the scheme may be discontinued, according to a press release issued by the Ministry of Finance, stating that Federal Minister for Finance and Revenue Ishaq Dar chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet.
The ECC considered a summary of the Finance Division regarding revision in Home Remittance Incentive Schemes. The ECC approved a proposal for changes in the contours of six incentives schemes of the SBP to improve the inflow of remittances and get optimal remittance inflow through formal channels. The ECC considered and noted the comprehensive report on damaged wheat of PASSCO due to rainfall and floods in 2022 presented by the Ministry of National Food Security & Research.
The ECC also considered a summary of the Ministry of Energy (Power Division) regarding a contract with TAVNIR Iran for the purchase of 104 MW electricity. The ECC approved amendments to the contract with TAVANIR related to extension of tariff for existing supply of 104 MW (Jackigur-Mand) from 1st January 2022 to 31st December 2024, negotiating tariff for additional supply (Polan-Gabd) and tariff agreed for additional supply of 100 MW through Polan-Gabd Transmission Line from 16th March 2023 to 31st December 2024. The ECC also considered and approved another summary of the Power Division regarding application of uniform tariff for KE consumers by way of tariff rationalization. The ECC approved tariff rationalization for K-Electric by way of adjustments that shall be applicable on the consumption of April, May and June 2023 to be recovered from consumers in three months (July, August and September 2023), respectively.
The ECC also considered and approved a summary of the Ministry of Energy regarding proposed amendments to the Transmission Line Policy 2015 for inclusion of ancillary services projects in its scope. A summary of the Ministry of Industries and Production regarding continuation of the Prime Minister’s Relief Package of five essential items at subsidized rates through the Utility Stores Corporation (USC) for FY 2023-24 for 10 months from 1st August, 2023 to 30th June, 2024 (excluding Ramazan) was approved with direction that there should be no increase in the price of Atta.
The ECC considered and approved following Technical Supplementary Grants: 1. Rs 3,000 million in favour of Ministry of Information & Broadcasting for Prime Minister’s Health Insurance Scheme for Media Workers, Journalists and Artists and Provisions of Film Finance Fund to MOIB. 2. Rs 500 million in favour of Ministry of Defence for Defence Services for security-related requirements of the JSHQ during FY 2023-24.