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ISLAMABAD:
A cabinet body on Wednesday approved to divert a major chunk of unspent Rs352 billion of the Prime Minister’s Covid-19 Relief Package to procure vaccines, as fresh details also disclose that the government used people relief money on non-Covid activities.

A chunk of the Rs875 billion that Prime Minister Imran Khan had earmarked to provide relief to people and businesses has also been spent on awareness campaigns, paying interest on the government loans and offsetting losses of the government departments, revealed the official documents.

The Economic Coordination Committee (ECC) of the Cabinet on Wednesday allowed utilizing the Rs352.3 billion that could not be spent during the last two years on procurement of vaccines.

“The ECC re-validated the amount of Rs352 billion for the FY 2021-22 for meeting related expenditures including procurement of vaccine for Covid-19 during the ongoing fourth wave,” stated the Ministry of Finance after the committee meeting.

Federal Minister for Finance Shaukat Tarin chaired the meeting through a video link.
It said the federal government aims to vaccinate at least 85 million by December 2021 and need to purchase Covid vaccine worth $1.2 billion.

In order to ensure that the relief measures are successfully implemented and socio-economic impact of the pandemic is mitigated, huge public funding would be required for this endeavor.

Out of the total Rs875 billion relief package, Rs335 billion had been spent in the fiscal year 2019-20 and Rs188 billion in the fiscal year that ended recently, leaving a balance of Rs352 billion.

The Ministry of Finance stated that the funds were allocated under the Economic Stimulus Package for the entire duration of the Covid-19 pandemic irrespective of the financial year.
More than half of the unspent funds – Rs184 billion to be precise – had been meant for paying Rs12,000 to each daily wage earner but would now be used for vaccine procurements.

The prime minister had announced Rs200 billion to compensate for the livelihood loss of the labour class, which his government could not disburse in two years.  The Rs5 billion of the Benazir Income Support Programme (BISP) have also been diverted towards the vaccine programme.

Imran Khan had also promised to give a Rs50 billion subsidy to the Utility Stores Corporation and after failing to do so his government will now divert the Rs40 billion for the vaccine programme.

The PM had announced Rs100 billion subsidy for gas and electricity bills. The official summary showed that the spending in two years remained at Rs56 billion and the Rs44 billion remains unspent.

The Rs56 billion claimed expenditures included Rs10 billion interest payments on the Pakistan Energy Sukuk and Rs23 billion were paid to Discos to compensate for losses due to less collection of bills. The actual subsidy that went to electricity consumers was mere Rs8 billion.

The prime minister had announced Rs49 billion relief for the agriculture sector but his government provided just Rs15.6 billion relief in two years. There are Rs33 billion that still remain unspent.

The Rs14 billion remaining amount against Rs30 billion duty drawback claims of the exporters could also go for vaccine purchases. The prime minister had allocated Rs50 billion for provision of medical equipment to health workers but Rs8.9 billion remained unspent.

The Rs41.4 billion spending that has been shown as expenditures on health workers also include Rs30 million expenses on awareness campaigns, Rs219 million on setting up the National Command and Operation Centre (NCOC) Secretariat and Rs25 billion on vaccine procurements.

This means that the federal government failed to live up to its promise of providing adequate equipment to health workers who have been dying while treating COVID-19 patients.
 Similarly, Imran Khan had allocated Rs100 billion for emergency relief funds but the spending in two years was Rs76.6 billion.

The Rs76.6 billion spending included Rs40 billion expenses on paying the Federal Board of Revenue (FBR) refunds; Rs509 million contributions towards Saarc Covid-19 Fund and Rs1.1 billion development expenditures on education projects related to Covid.

The health ministry has sought $393 million or Rs63 billion for procurement of vaccines, which the Ministry of Finance is refusing to provide due to lack of space in the budget.

The sources said Special Assistant to the Prime Minister on Finance Dr Waqar Masood chaired a meeting on Wednesday to decide the matter.

The meeting remained inconclusive and Dr Masood directed relevant officials to hold a meeting with the representatives of the Asian Development Bank and the World Bank to address concerns of the health ministry about disclosure of price being procured from China in case of seeking loans from them.

The ECC deferred two summaries related to setting up the intervention price of cotton and a new strategic trade policy framework.

Cotton price

The ECC again reviewed the proposal of giving Rs5,000 per 40 kg cotton price to farmers. This proposal was referred back to the ECC by the federal cabinet. Adviser to the PM on Commerce Razak Dawood, who represents the textile lobby, opposed the decision both in the ECC and the cabinet meetings.

The ECC deliberated over the recommendations by the Cotton Price Review Committee (CPRC) and it was decided that another consultative session would be held with all key stakeholders on board including Ministry of National Food Security & Research, Finance Division and commerce ministry to finalize the recommendations and present the revised summary before the cabinet.

Trade Policy

The ECC considered a summary presented by the Ministry of Commerce regarding the Strategic Trade Policy Framework (STPF) for 2020-25 to enhance export competitiveness of Pakistan through a framework of policy interventions.

The finance minister said the factors related to a market-based realistic exchange rate must be incorporated under the proposed STPF 2020-25.

He further stressed the need to include specific measures for encouraging Foreign Direct Investment (FDI) and consolidation of the fragmented export industry in Pakistan.

After due deliberations, the committee decided to review the draft STPF 2020-25 after having another consultative meeting with all relevant stakeholders and present an updated policy framework before the next ECC for approval.

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