Govt Decides To Use 10 Million From Covid-19 Funds For Loan Interest Payments
The federal government decided that an amount of 10 million rupees from the coronavirus fund will be used to pay off the interest on loans taken to retire circular debts. Terms of negotiations were also approved on Wednesday for debt restructuring to reduce electricity tariffs.
The Express Tribune reported that even though the prime minister desires to reduce power tariffs by renegotiating terms of the deals, official documents suggest that there will be no meaningful relief, and instead, the consumers will be overburdened in the longer run.
Headed by Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh, the Economic Coordination Committee (ECC) of the cabinet has ignored the approval of additional financial incentives that would be needed for setting up of special economic zones (SEZs).
This package for the SEZs has been due for the last five years and also has delayed investments from the Chinese businesses under the China-Pakistan Economic Zones. The summary will be brought before the ECC again after addressing observations made by the central bank. The package is now expected to be finalised next month.
The ECC, in principle, allowed the economic affairs ministry to sign a memorandum of understanding (MoU) to avail the G-20 debt relief initiative. Pakistan is required to enter into this MoU with all official bilateral creditors, including the Paris Club creditors, to implement the debt relief initiative of G-20.
The 10 million worth of allocations from the PM’s Covid-19 relief funds will be used against a stop-gap arrangement for the payment of interest on the Pakistan Energy Sukuk II for a period of six months or amendment to the Nepra Act whichever is earlier, according to a finance ministry handout.
The chairman also reassured the forum that Pakistan is very much capable of honouring it’s financial and commercial needs. He also said that Pakistan will not be asking for relief in payment for any loans later.