The Economic Coordination Committee (ECC) of the cabinet has increased additional customs duty (ACD) on imported tyres and motorcycle parts manufactured locally. It has also approved first-loss loan coverage for small and medium enterprises (SMEs) and small farmers.
Finance Minister Muhammad Aurangzeb chaired the ECC meeting on Thursday. The committee also approved investment of Export Development Fund (EDF) resources in government securities and cleared 11 supplementary grants worth Rs57.85 billion.
Higher Duties to Support Local Industry
The ECC raised ACD on imported radial tyres and motorcycle parts produced locally from 4 per cent to 11 per cent. It also increased the duty on motorcycle parts imported by local manufacturers from 11 per cent to 31 per cent.
Fact Check: Fake AI Images Link Mahira Khan and Sajal Aly to India Protests
The government said the measures aim to promote domestic manufacturing and support local producers.
According to an official statement, the committee approved an amendment to SRO 693(I)/2006 on the recommendation of the Revenue Division. The amendment concerns additional customs duty on imported tyres that are also manufactured in Pakistan.
Loan Guarantees for Small Businesses and Farmers
The ECC approved a financing framework developed by the State Bank of Pakistan to expand access to credit for small businesses and farmers.
The framework brings eligible Agency Financial Institutions (AFIs) into the government’s existing risk coverage schemes through wholesale and agency arrangements.
Under the scheme, first-loss coverage will extend to up to 20 per cent of eligible loans for SMEs and 10 per cent each for small farmers and medium-sized industries.
The government said the arrangement would widen access to finance by using the networks of eligible microfinance and non-banking financial institutions.
Affordable Housing Finance
The committee also approved an addendum to the Second Supplemental Trust Deed of the Credit Guarantee Trust Fund (CGTF).
The fund was originally established for the Prime Minister’s Mera Pakistan Mera Ghar scheme. The amendment expands its scope to improve the use of the existing credit guarantee facility and support affordable housing finance.
ECC Clears Rs57.85bn in Supplementary Grants
The ECC approved 11 supplementary grants worth a combined Rs57.85 billion for various government departments and projects.
The approvals included Rs2 billion for the Small and Medium Enterprises Development Authority (SMEDA) to implement its approved business plan in line with the prime minister’s vision.
The committee also approved Rs11.329 billion for the Industries and Production Division. The funding will meet the immediate financial needs of the Utility Stores Corporation and support completion of its closure process.
On the Privatisation Division’s request, the ECC allocated Rs8 billion to the Public Private Partnership Authority (P3A). The grant will support the development and implementation of infrastructure projects through public-private partnerships.
The Ministry of Railways will receive Rs10 billion to provide budgetary cover for the Thar Coal Rail Connectivity Project. The project aims to connect Thar coal resources with the rail network and support the use of domestic coal for power generation and other industrial activities.
The decisions came at the end of the first quarter of the fiscal year, a day after Pakistan reached a staff-level agreement with the International Monetary Fund (IMF).
