ZAHEER ABBASI

ISLAMABAD: Prime Minister Imran Khan on Tuesday announced Industrial Support Package (ISP) that offers additional consumption of electricity to small and medium industries at 50 percent less rates. The package became effective from Nov 1, 2020.

All the industries, big and small, would pay 25 percent less on consumption of additional electricity by them over the next three years, said the prime minister during a media briefing along with his economic team after a cabinet meeting that approved the package.

For instance, if an SME was buying at Rs16 per unit, would pay Rs8 per unit on consumption of additional electricity after November 1, 2020.

This would continue till June 30, the prime minister added.

He further stated that the package was being announced to increase exports and productivity as 25 percent higher electricity by 25 percent cost. Pakistan compared to regional countries, India and Bangladesh has increased the industry’s input cost that makes it almost impossible to compete with regional players in the international market.

The prime minister said that electricity was expensive in the country owing to expensive contracts signed by the previous governments, and as a result exports had declined from US $25 billion in 2013 to US $20 billion in 2018.

The premier said the government’s first priority was to boost exports and to increase exports, incentives were provided to exporters, whose outcome was visible in post-COVID as Pakistan was the only country in the Subcontinent, whose exports witnessed an increase.

He said that cement sales registered record high while motorcycles and vehicles sales also increased. The construction industry had also been growing rapidly, he added.

He said wealth creation in the country would help the government repay foreign debt.

He appealed to people to wear face masks in winter, and if the number of virus cases increased the government would not stop businesses and allow them to operate under the notified SOPs.

Adviser on Finance Dr Abdul Hafeez Shakih said the government had brought economic stability by taking difficult decisions and now the government policies were focused on the people of the country.

The government has taken two big decisions with the first one to collect taxes from the rich, and second to reduce government expenditure.

Expenditures on Prime Minister’s House, Cabinet and President’s House were reduced, and civilian and military expenditure were frozen, and the government did not borrow any money from the State Bank of Pakistan.

He said that outcome of those decisions was that country primary deficit was in surplus.

He said the country’s exports were increasing after exporters were provided subsisted gas, electricity, and loans, and taxes on hundreds of raw material were abolished. He said remittances were also showing growth, current account deficit was reduced from $20 billion to zero, and social safety net budget was increased to Rs192 billion, and the people of the FATA were provided a historic package.

Moreover, he said, that subsidy was provided to Utility Stores Corporation (USC) Rs250 billion refunds were released, and a special package for construction was announced.

The adviser said that Rs1.2 trillion ‘corona’ package was provided and debt repayment of Rs5 trillion was also made.

There was no increase in the country’s debt during the first four months of the current fiscal year, Dr Shaikh he said.

Hammad Azhar, Minister for Industries said that the federal cabinet had taken a difficult decision to provide electricity at discounted rate, and there would be off-peak hours 24 hours.

The minister said that all those industries that would consume additional electricity with B1, B2 and B3 connections would get a 50 percent discount, and third thing is that all the industries with electricity connections from B1 to B5 there would get 25 percent discount on consumption of electricity.

He said that all the industries, were growing positively almost at a time when a very large number of the countries in the world were witnessing four percent negative growth – and could not meet their orders, so it was necessary to provide country’s industries electricity at a discounted price and do away with peak hours to increase their production.

He said the package would create employment massive opportunities and increase productivity.

Asad Umar, Minister for Planning and Development stated that economic activity picked up was open relatively faster in Pakistan as compared to the other countries due to effective decision making against the COVID-19 challenge.

He said that the question is virus cases was increasing and there was a need to ensure that the situation should not lead to affecting business activity by adopting to required SOPs.

Omer Ayub, Minister for Power, said that previous governments “laid landmines” in power sector and the government was moving to remove them by correcting expensive and faulty agreements, and more than 70 percent power was being produced through imported fuels.

During the last two years, wind and solar power had not increased but an energy plan was made to move on to renewable energy by adding 18,000 MW by 2030, and 70 to 80 percent energy mix would be produced locally.

He said the government was also restructuring competitive market that would increase electricity buyers and producers.

APP adds: Prime Minister Imran Khan on Tuesday announced a relief package for industrial sector with 50 percent reduction in rate of commercial electricity on additional usage by Small and Medium Enterprises.

Prime Minister said for next three years, all industries on additional usage of electricity would be provided 25 percent relief considering their previous bills.

He also announced an end to peak-hour system for commercial electricity users, with provision of uniform electricity rates round the clock.

Imran Khan said a strong infrastructure of energy was vital to help industries grow and compete with international market.

"It is extremely important for Pakistan to strengthen industrialization, which will lead to wealth creation and thus help pay off the debt," he said.

Prime Minister said soon after assuming the government, his team's focus was on increasing exports as "higher the exports, stronger the economy".

Minister for Industries and Production Hammad Azhar said under the package, which was prepared on the special instructions of Prime Minister Imran Khan and approved by the cabinet today, the industries would be provided electricity at off-peak hours’ rate for 24 hours for next three years.

The Small and Medium Enterprises (SMEs), he said, would be getting 50% tariff relief on the use of additional electricity, considering their bills of November 2019, during next six months, while all the industries would be provided with additional electricity on 25% reduced rates for next three years.

Hammar Azhar said the decision would help boost economic growth, strengthen industry, increase exports, and create employment opportunities.

Minister for Planning, Development and Reforms Asad Umar said it was for the first time that such a big reforms package in the energy and power sector had been announced for the industries with the fixation of tariff for three years.