ECC nods Rs33bln in markup subsidy for housing finance

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Wednesday approved Rs33 billion as markup subsidy to housing finance to boost construction sector.

The ECC approved the subsidy for housing and construction sector to revive economic development amid COVID-19 pandemic. Markup subsidy will be provided for 10 years on bank financing.

Accordingly, end-user markup rate on housing units measuring up to five marla (150 square yards) will be five percent for first five years and seven percent for next five years. For housing units measuring 10 marla, end-user markup rate will be seven percent for first five years and nine percent for next five years.

The subsidy will be given on units where the price of the housing unit does not exceed Rs3.5 million for 3-5 marla and is not more than Rs6 million in case of 10 marla house.

Overall, the government allocated Rs33 billion for the loan tenor of 10 years with Rs4.77 billion to be allocated in the current financial year for the payment of markup.

ECC, in a meeting presided over Adviser to Prime Minister on Finance and Revenue Hafeez Shaikh, approved allocation of Rs41.8 million for ministry of information technology and telecommunication for deployment of systems, data analysis, modeling and mobile apps with the instructions that wherever possible the budget may be rationalised/ minimised with the consultation of finance division.

ECC also approved the establishment of Balochistan Mineral Exploration Company Limited (BMEC) with the support of the federal government. It will be joint venture of the federal and provincial governments for formation and operations of BMEC with 10 percent shareholding amounting to Rs320 million to be injected in two equal tranches through Pakistan Mineral Development Corporation (PMDC).

The Petroleum Division and PMDC are authorised to execute the shareholders agreement and complete all required legal, regulatory and corporate formalities in connection with formation, incorporation and equity participation in BMEC.

Ministry of food security brought a proposal to the ECC on utilisation of the Fiscal package of Rs100 billion allocated for the agriculture and small and medium enterprise sector. ECC approved allocation of Rs15.7 billion , earmarked for nitrogenous fertilisers to be diverted to phosphate and potash fertilisers.

It was also decided to immediately release and disburse the subsidy on whitefly pesticides.

The committee also approved Rs1.5 billion subsidy for tractors and markup of Rs6.8 billion on all loans for 12.5 acres of land holdings disbursed by Zarai Taraqiati Bank with passbook as collateral for FY2020/21 only to be adjusted through book and tax adjustment of State Bank of Pakistan and Federal Board of Revenue, respectively.

ECC directed the food security ministry to properly monitor and evaluate the mechanism of disbursement of various subsidies for maintaining transparency of the system and to ensure that benefit reaches to the small farmers.

ECC decided to allocate 150,000 metric tons of wheat to the Pakistan Army from Pakistan Agricultural Storage and Services Corporation resources on payment basis for the year 2020/21.

The committee directed the food ministry to give a detailed presentation on the mechanism of determination of prices and point out the gaps in the system.