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Aftab Maken
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet, chaired by Finance Minister Senator Muhammad Aurangzeb, on Thursday approved major economic decisions including over Rs 2.9 trillion in Technical Supplementary Grants (TSGs), a revised natural gas pricing structure for FY2025-26, and a landmark risk coverage scheme for small farmers.
Major Grants Approved
As part of its fiscal planning under the Pakistan Budget 2024-25, the ECC approved TSGs for multiple ministries:
- Rs 15.839 billion for the Ministry of Defence to meet shortfalls in pay and allowances, and clear dues under the PM’s compensation package for martyrs of the recent Pakistan-India conflict.
- Rs 63 million for the Finance Division to cover rent of office and residential spaces of the Auditor General of Pakistan.
- Rs 829.67 billion for domestic debt repayment, and Rs 1,774.20 billion for foreign loan repayments.
- Rs 100 million to the Ministry of Foreign Affairs for expenditures under the “Other Delegation Abroad” head.
- Over Rs 2.3 billion to the Ministry of Interior & Narcotics Control for operations, vendor liabilities, and infrastructure upgrades for ICT Police and Frontier Corps in KP and Balochistan.
- Rs 5.5 billion for SUPARCO under the Strategic Plans Division.
- Rs 117.97 million to the Petroleum Division for upgrading the Pakistan Petroleum Corehouse.
- Rs 254.57 million for onward transfer to the Government of Balochistan for incentive payments to PAS/PSP officers.
- Rs 198 million for repair of the Executive Building, Islamabad.
New Gas Pricing from July 1
The ECC approved a revised natural gas pricing structure for FY2025-26, set to take effect from July 1, 2025, in line with OGRA recommendations and IMF structural benchmarks.
Key features of the revision include:
No change in gas tariffs for household consumers, except minor increases in fixed charges to cover asset costs. Around 10% price increase for bulk users, power plants, and industrial consumers. Focus on shifting from cross-subsidies to targeted subsidies for low-income households.
This energy tariff adjustment aims to support ongoing energy reforms, circular debt reduction, and economic recovery.
Sugar Price Stability and Remittance Reforms
To address rising sugar prices, the ECC reviewed a proposal from the Ministry of National Food Security and Research (MNFSR) and formed a 10-member steering committee to assess import options and report back with a concrete plan.
The ECC also discussed revisions in the home remittances incentive scheme, instructing the State Bank of Pakistan and Finance Division to submit a comprehensive roadmap by July 31.
New Risk Coverage Scheme for Small Farmers
In a significant move to boost agriculture financing and support underserved rural areas, the ECC gave in-principal approval to a risk coverage scheme scheduled for launch on August 14, 2025.
The scheme is expected to bring 750,000 new agricultural borrowers into the formal credit system. It aims to generate Rs 300 billion in incremental credit over 3 years (FY26–FY28).
Budgetary support of Rs 37.5 billion is planned to cover operational and risk-related costs through FY31. This initiative aligns with the government’s financial inclusion, rural uplift, and agriculture transformation agendas under Vision 2030.
