Prime Minister's aide on Institutional Reforms and Austerity, Dr. Ishrat Hussain, has suggested that Prime Minister's Relief Package should also be extended to Micro Finance Enterprises which are affected with the outbreak of Covid-19, well informed sources told Business Recorder.
He tabled his suggestions at a meeting of Economic Coordination Committee (ECC) of the Cabinet held on April 27, 2020.
He was of the view that Micro Finance Enterprises are not only in large numbers (approximately 5 million) but also documented, adding that the relief may provide great support to Micro Finance Enterprises including borrowers in strengthening the economy of the country.
Ministry of Industries and Production informed the ECC that the Prime Minister has approved relief package of Rs100 billion for the support of the SMEs and agriculture sector.
The MoI&P was tasked to develop the Terms of Reference (ToRs) in collaboration with the State Bank of Pakistan (SBP) for utilization of amount earmarked for SMEs.
Accordingly, the MI&P started an exercise to develop a concept paper and formulate proposals through Small and Medium Enterprises Development Authority (SMEDA) towards this end. SMEDA approached SBP with the request for help to ensure equitable and transparent disbursement of the relief package.
SMEDA also designed an online survey based on a focused questionnaire. The response to the online survey was very encouraging as 920 individuals and companies offered their feedback from all over the country.
The survey report prepared on the basis of the responses was received and consequently SMEDA identified seven areas of intervention for equitable and transparent disbursement of the relief package.
Following a series of comprehensive deliberations, indirect cash flow support to SMEs through pre-paid electricity was considered to be quick and credible proposal. Power Division supported the idea during different consultative sessions.
The sources said the relief package will be titled "Chota Karobar Sannat Imdadi Package" and the following measures were proposed :(i) base period for estimating electricity consumption, May-July 2019. For meters for which electricity consumption data is not available for the (full) base period appropriate averages will be used ;(ii) coverage- approximately 95 per cent commercial and 72 per cent industrial consumers (only eligible for commercial and industrial meters connected before March 1, 2020). For commercial consumers, connected load of up to 5kW (maximum), government will support for three months not to exceed Rs100,000.
For industrial consumers, connected load of up to 70 kW (maximum GoP support 3 months not to exceed Rs450,000;(iii) provision of pre-paid electricity- 3 x average bills during base period for commercial and industrial consumers;(iv) period of consumption - 6 months starting from May/June 2020.
Upon expiry of the consumption period or cash relief credited in 3 bills, whichever is earlier, un-utilized pre-paid credit or allocations to Power Division will stand surrendered back to the Ministry of Finance; (v) program roll out - May 2020 billing onwards (provided codal formalities are finalized within April), otherwise may be moved to June 2020 billing;(vi) Power Division in consultation with the Ministry of Industries and Production will develop a complaint registration and grievance redressal mechanism to ensure timely and effective disposal of complaints and grievances; and (vii) a block allocation of Rs2.5 billion may be made for AJ&K and GB for disbursement through special arrangements with the approval of ECC.
The total financial impact worked out was Rs50.69 billion to be credited to different Discos through the Power Division. The meeting was informed that the relief package would also include consumers of K-Electric.
Minister for National Food Security and Research, Syed Fakhar Imam, said that relief package may also be extended to agriculture tube wells in the country.
The ECC directed the Ministry of National Food Security and Research to bring the report of wheat monitoring committee on wheat procurement in the next ECC meeting for consideration.
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