ECC enhances borrowing powers of provinces.

ISLAMABAD -- The Economic Coordination Committee (ECC) of the Cabinet on Monday substantially enhanced borrowing powers of the provinces to secure cash surplus for budget support in line with the International Monetary Fund (IMF) programme.

The meeting presided over Finance Adviser Dr Abdul Hafeez Shaikh also put in place a series of measures for import of about 2.5 million tonnes wheat to control its runaway prices and gave 45 acres of land to the Inter Services Intelligence (ISI) in Islamabad at a cost of Rs490m from the federal budget.

The Ministry of Finance had moved a case for special honoraria equivalent to up to three basic salaries to federal government employees at the discretion of federal secretaries but was withdrawn at the last moment.

The summary proposed one-month basic salary to all employees, twomonth salary to 10 per cent employees and 3-month salary to 5pc employees of the ministry with the consent of the minister concerned.

On the request of the Finance Division, the ECC approved a new lending policy to the provincial governments for their Ways and Means requirements and for signing of agreements by the division and the State Bank of Pakistan to implement the policy.

Under the new policy, the existing Ways and Means limit for Punjab has been increased by almost 108pc to Rs77 billion from Rs37bn at present.

The limit for Sindh was increased by 160pc to Rs39bn from Rs15bn at present, followed by 170pc increase for Khyber Pakhtunkhwa f rom Rs10.1bn to Rs27bn. The limit for Balochistan was also enhanced by almost 141pc to Rs17bn from Rs7.1bn at present.

The revised lending policy would allow the provinces to have higher overdraft limits to meet their expenses and salaries without waiting for the federal transfers on the basis of revenue collection with a time lag. The four provinces would provide about Rs242bn cash surplusto the centre during next fiscal year, in line with the government`s commitment under the IMF programme.

On a proposal by the Defence Division, the ECC allowed the Capital Development Authority (CDA) to collect charges against allotment of 45 acres land in Jagiot Farm, Islamabad to Directorate General of ISI at a rate of Rs2,250 per square yard with a total implication of Rs490.05m. The ECC also approved Rs490.05m grant for the purpose.

A proposal by the Finance Division for a grant of Rs1.3bn to meet critical demands related to medical stores and utilities for the Pakistan Navy was also approved.

`Ensure...