Inside Financial Markets

Textile Policy delayed for One month : ECC

eccTextile Policy delayed for One month : ECC

The Federal Minister for Finance Senator Mohammad Ishaq Dar chaired the meeting of the Economic Coordination Committee at the PM secretariat.

As the Prime Minister has already approved the proposal , the Ministry of National Food security and Research moved a summary on the his direction to ECC  to compensate the farmers of basmati rice @ 5000 per acre subject to the following provisions:

·        The total amount of compensation may be shared equally between the Federal and provincial governments. The total amount of subsidy will be around Rs.10 billion.

·        The compensation will be made to the small growers of 25 acres only

·        The farmers who have already received compensation against crop damage in recent floods in Punjab will not be eligible to this additional compensation.

The Committee also considered and approved the proposal moved by the Ministry of Water and Power for allowing extension of subsidy to the Agriculture consumers @10.35Rs per unit till 30.6.2015. According to the earlier decision, Ministers of W&P and Finance had decided in a meeting with the representatives of Kissan Ittehad( in August 2013) to subsidize tariff for the Agriculture consumers whereby the Federal Govt. bore the tariff differential subsidy and provincial governments were directed to pay the GST. In today’s decision it was also decided that the GST will be adjusted against the electricity fee payable to the provinces. It is also important to mention that during peak hours agri- tube wells will not be entitled for power supply.

The Federal Minister for Finance said that the amount paid in subsidy will be around 22 billion rupees which was around 18.5 billion rupees last year but the Federal Government has taken the decision to support the farmer as with the help of this decision Punjab has given historic crop of wheat production 19.470 million ton during 2013-14, the Fuel Price adjustment will also be paid by the federal government, added the Minister.

 The ECC also considered and approved the policy guide lines under section 21 of the OGRA ordinance 2002. According to the guide lines

·        Volume pilfered by non consumers but detected and determined by the companies in accordance with OGRA procedure as provided in rule 30 of Natural Gas licensing Rules 2002.

·        Till the finalization of the new tariff regime by OGRA, the income from non-core activities (LPS, Meter Manufacturing plant, Royalty from JJVL and sale of condensate/LPG may also be provisionally treated as non-operating income.

·        The provision of doubtful debts may be determined at the minimum of 1% of the sales in line with the prevailing accounting practices.

The chair and the participants of the meeting however did not agree to the idea of “volume against minimum billing amount charged to domestic consumers”. The chair emphatically ordered all the relevant ministries and authorities to discuss the proposals in advance and suggest mutually accepted and well prepared plans to be accepted by the esteemed forum as this place is not the place for debate on minor details.

The chairman also acknowledged and appreciated the services of MS. Rukhsana Shah, federal Secretary of Textile Industry in preparing the Textile policy 2014-19, but gave the Ministry one month’s period to review and scrutinize it  in detail as suggested by Minister for planning.

The ECC also approved the proposal of Ministry of P&NR to allocate around 110MMCFD of gas produced in KP to Khaber pakhtoonkhwa  for power generation with the condition that the gas will be given to PPIB available to KP only after following the appropriate procedures laid down in rules and regulations of the PPIB.


Sanie Khan

Sanie Khan holds a deep knowledge of the financial markets in Pakistan. Based in Karachi, he has over 20 years of hands-on management experience in financial technologies and managing operations in the financial sector. He was the General Manager at the Pakistan Stock Exchange (PSX) for 17 years. He along-with senior members of Exchange

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)