PM announces Rs 1 trillion stimulus package

Prime Minister Imran Khan has announced a one-trillion-rupee ($6.308bn) stimulus package for the industry, businesses and labour, to protect them from the adverse impact of coronavirus.
While giving details of the stimulus package during an interaction with anchorpersons, the prime minister stated that package include; (i) Rs 200 billion for the labour and the provinces' share would be additional to this as the federal government is in discussion with businesses not to lay off workers and with the provinces to help add up to the package; (ii) the government has taken two decisions for export industry with immediate release of Rs 100 billion tax refunds, so that they could have cash and spend on their labour and deferred their principal and interest payment; (iii) Rs 100 billion for small and medium industries and agriculture and deferred their interest payments on loans apart from providing concessional loans and allocated money to lessen the input cost for farmers.
The prime minister said that the government had also allocated Rs 150 billion for payment of Rs 3,000 monthly to the poor families for four months, and Panah Gahs (shelter homes) would be expanded, so that the people could get food and live after going thorough stringent screening for coronavirus.
The government earmarked additional Rs 50 billion for the Utility Stores Corporation (USC), and kept Rs 260 billion for wheat procurement; petrol, diesel and kerosene, and light-diesel prices would be reduced by Rs 15, whose impact would be Rs 75 billion.
Those consuming up to 300 electricity units would be able to pay their bills in three installments and similarly gas consumers with bills up to Rs 2,000 monthly have been put on 'deferred payment'.
He said that Rs 50 billion had been earmarked for medical workers, equipment and taxes on essential items, pulses, ghee and other items have either been reduced or eliminated.
He said Rs 100 billion had been allocated to deal with the emergencies arising out of the lockdown. "Rs 25 billion has been allocated for the NDMA procurement," he said. He said that a separate package would be announced for the construction industry.
In response to a question about a cut in interest rate, prime minister referred the question to his adviser on finance Dr Hafeez Sharikh who stated that the State Bank of Pakistan was fully autonomous and it was its purview. He added that a meeting of the Monterey Policy Committee is in progress and its decision would be shared with the media.
He said that with regard to a question about hot money the SBP has the capability to deal with the matter in a better way. The Prime Minister said, "there is obvious argument to bring down interest rate and a discussion has been going on in the government on the interest rate but the government wants to move in a prudent way".
Shaikh said that of the total Rs 31 trillion debt Rs 5000 billion was repaid by the current government in a situation when the total tax collection was Rs 4 trillion and 57.5 percent of it had to be transferred to the provinces. He said that export growth was zero percent in the last 10 years and the current account deficit was the highest at 20 billion dollars while 95 billion dollars was foreign loans.
Shaikh said that current account deficit had been reduced from 20 billion dollars to three billion dollars and the exchange rate was stable and exports were increasing after 10 years. Shaikh said that Rs 1 trillion package had been announced by the prime minister.
The prime minister warned against making any decision in haste and said that such decisions' impacts were far more dangerous than the coronavirus itself, so there was a need to act cautiously and prudently. He said lockdown virtually began immediately after the National Security Committee (NEC) meeting wherein closure of schools, public places and gathering, was decided subsequent to reporting of 21 coronavirus cases but it was not a complete lockdown.
He said that lockdowns take place incrementally after assessing the situation on the ground, and curfew was its last stage. Since closure of schools, he said a debate was started in the country that "Sindh has done this, and Punjab has not done that".
The primer deplored that unfortunately the entire decision-making had been going on in the country from last 70 years for a specific class. The premier stated that if he was living in DHA [a posh locality] there would have been no impact of curfew on him because he would have stashed sufficient supplies at home but what about those living in slums in a single room with a family of 10 people?
"Do we think before imposing curfew as to what those living in slums would do and whether we have the capability to provide food to them or do we have the capability to continue ensuring supply of food and other essentials in case of complete suspension of transport," he asked.
He said that there was in fact a lockdown in the entire country but the government was reviewing the evolving situation, and received reports of shortage of pulses, as pulses are imported.
The premier said that his sole fear was that if the government imposed curfew it would negativelyy affect the low-income group The prime minister further stated that the government would prepare a force of volunteers to create awareness and deliver food to the poor at their homes and this would be the only way to make the curfew, if imposed, work.
The prime minister added that he wanted a volunteers' force by tapping the youth for delivery of food at homes and overseas Pakistani to mobilize resources because government would be in need of finances, if the situation prolongs. On a question with regard to freedom of media, he said "do not talk to me about media, talk about corona."
The federal government was ready from January 15 and coronavirus was being discussed in every cabinet meeting. There are 900 cases and four deaths, he said, adding that no one knows what would happen but they were praying that things remained in control.
Pakistan has remained in touch with China and there is not even a single patient who has come from China. But unfortunately Iran was not able to deal with the virus, so Pakistani pilgrims arrived at Taftan and every possible measure was taken at far-flung border of Balochistan.
The premier said that after 18th amendment provinces are free to take their decisions and the federal government can advise them and only step federal government is taking with delay is suspension of transport because this would severely affect the supplies.
"We need to review the situation closely and its consequences as situation is evolving and may continue for six months," he added. He said that even developed countries giving stimulus package of trillions have failed to cope with the situation. He asked how Pakistan's neglected health system could deal with if situation deteriorates.
The prime minister said that Pakistan's economic situation was moving in the right direction before coronavirus but this crisis may have unending consequence. He stated that he is responsible for every economic decision and all decisions are being taken after detailed discussions and on a couple of occasions opinions before decision making were solicited even from the experts based in foreign countries.
He said that 2019 was the most difficult year of his life because when he assumed office the country was almost on the verge of bankruptcy. He said that Singapore and Taiwan had 50,000 dollar per capita income and this war cannot be won unless everyone helps government and administration, adding that "army is involved and now the government will also get youth involved to create awareness".
"We have mobilized ulema and they are trying to create awareness," he added. The NDMA chairman said that half of the total ventilators available in the country were not functional when the coronavirus arrived in Pakistan, and now by May the NDMA would arrange 10,000 ventilators and arrival of ventilators would begin from China from today.
He said that 50,000 test kits would also arrive from China tomorrow and real work would start from Friday. Meanwhile, Minister for food, and national security stated that there is a ban on export of onion and sufficient stock of ghee and pulses is available and some crops would be arriving and there would be no shortage of essential commodities.
Meanwhile, Finance Ministry has issued details of, the Prime Minister has approved the multi-sectoral relief package announced on Tuesday in a major effort to address the crisis resultant of Covid-19. The package is aimed at providing quick relief to all who have been affected by the pandemic. The details of the major announcements included ; (1) daily wages/labour Rs 200 billion; (2) industry plus exporters Rs 100 billion for tax refunds as well as deferment interest and/or principal; (3) agriculture and SME Rs 100 billion as well as deferment of loans and concessional loans - underwriting by government for credit/subsidy; (4)relief of vulnerable families Rs 144 billion for 12 million families for a period of four months as well as panagah to be expanded with Rs 6 billion; (5) Utility Stores Rs 50 billion; (6) wheat procurement Rs 280 billion;(7) cut in prices of per liter of petrol Rs 15, diesel Rs 15, kerosene Rs 15, LDO Rs 15,Rs 70 billion for three months; (8) electricity 300 units per month Rs 36 billion (Quantum relief • Rs 2000 gas bill three monthly Installments;(9) tax break on health and food supplies Rs 15 billion;(10) residual/energy Fund Rs 100 billion; (11) NDMA Rs 25 billion.