ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet approved introduction of necessary policy interventions in the Export Facilitation Scheme (EFS) 2021, including reduction in input utilisation period as well as withdrawal of EFS facility from importers of iron, envisaging to plugging revenue leakages.
The ECC of the Cabinet met under the chairmanship of the Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, which also expressed concern over the rising prices of sugar, vegetables, and edible oil, particularly in light of declining prices in the international market.
Besides the regular agenda, the meeting focused on reviewing the trends in inflation and the prices of essential commodities, as presented by the Economic Advisor’s Wing of the Finance Division.
FBR grilled by SIFC for misuse of EFS
At the outset, the ECC conducted a monthly review of inflation trends as per its earlier decision. The Cabinet body was informed that inflation during the first half of fiscal year 2025 (July-December) had decreased significantly to 7.2 percent, compared to 28.8 percent during the same period last year.
Additionally, inflation for the month of December 2025 was recorded at 4.1 percent, a sharp reduction from 29.7 percent in December 2024. This marked the lowest inflation rate in 80 months, largely owing to exchange rate stability, prudent fiscal management, and improved supply arrangements of essential items across the country.
The ECC expressed satisfaction with the ongoing decline in the Sensitive Price Index (SPI) over the past few weeks. However, the chair emphasised that the reduction in core inflation, average inflation, and the downward price trends should translate into tangible relief for the common man.
Despite positive trends, the committee expressed concern over the rising prices of sugar, vegetables, and edible oil, particularly in light of declining prices in the international market.
To address this, the ECC directed the Ministry of Industries and Production and the Ministry of National Food Security and Research to collaborate with the National Price Monitoring Committee (NPMC) and report back to the ECC within two weeks with measures to ensure the maintenance of strategic reserves of wheat, sugar, and pulses, as well as to improve the supply chains of essential items ahead of the holy month of Ramazan.
Furthermore, the ECC called upon Provincial Price Control Committees to enforce strict compliance with the price control mechanism, curb cartelisation, and prevent undue profiteering in order to protect consumers from unfair price hikes. The chair reaffirmed the government’s resolve and commitment to ensuring the availability of essential commodities at affordable prices for the people of Pakistan.
Amongst the regular agenda, the ECC approved a summary submitted by the Revenue Division for introduction of necessary policy interventions in the EFS 2021 with a view to plugging revenue leakages without disturbing the compliant exporters.
The proposed changes in the EFS seek reduction in input utilisation period, input authorisation based on production capacity/input-output ratio, replacement of insurance guarantees with bank guarantees, vendor facilitation controls, drawal of samples to ensure the utilisation of imported input in the exported goods, and withdrawal of EFS facility from importers of iron and steel scrap.
The ECC also approved another proposal by the Revenue Division for release of a technical supplementary grant of Rs2.79 billion for procurement of arms and ammunition component and engaging Nespak as a design consultant for Digital Enforcement Stations (DES) and check posts.
The ECC also considered and approved a proposal by the Ministry of Interior for release of a technical supplementary grant (TSG) of Rs494.56 million to Frontier Corps KP (North) for construction of barracks and check posts.
Regarding another proposal by the Interior Division for release of a TSG of Rs1.792 billion for smooth conduct of RekoDiq project activities as per MoU/agreement executed with the Reko-Diq mining company, the ECC directed the proposal be put up again in the next meeting with clear visibility of how the requisite grant was meant to be spent as regular funds were already allocated for the current expenditure.
The Cabinet body also considered and approved a summary by the Power Division seeking amendment to a 16th February 2024 mediation agreement pertaining to claims of KE for tariff differential subsidy and KWSB and payables of KE to different state-owned enterprises (CPPA/NTDC and SSGC), with the proviso that it would not lead to any increase in the tariff.
Finally, a proposal from the Intelligence Bureau Division for provision of a TSG of Rs500 million was also considered and approved.
Copyright Business Recorder, 2025
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