Pakistan releases Rs 75 bn to support laborers amid virus lockdowns

KARACHI: Pakistan on Wednesday released Rs 75 billion from Prime Minister’s Relief Package that was established for targeted payments to low-income groups, especially laborers and daily wage earners, who have significantly suffered due to the lockdown situation in the country.
The decision was taken at a meeting of the Economic Coordination Committee (ECC) of the cabinet that was chaired by Special Assistant to Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh.
According to a statement issued by the Ministry of Finance, the potential beneficiaries will receive Rs 12,000 under the government’s flagship Ehsaas program.
For this purpose, the government has decided to create a fourth category in the “Ehsaas Kifalat” scheme. The new category will also use the same filters that have been in place under the program to scrutinize and identify potential beneficiaries.
The federal government has provided economic relief to the most vulnerable social segments, hoping to benefit up to six million low-income individuals under the planned category in addition to the 12 million who have already been targeted.
“Mazdoor Ka Ehsaas Program,” designed to take care of laborers, aims to extend support to low income groups in the current economic environment.
Pakistan has more than 10,000 confirmed cases of coronavirus and over 210 COVID-19 deaths. The country has also been undergoing partial lockdowns to flatten the curve, though the precautionary measures and imposed restrictions have also resulted in an economic slowdown.
According to an estimate, these lockdowns are expected to impact the livelihood of 31 million people working as daily wage earners and street vendors etc.
The Pakistan Institute of Development Economics (PIDE) estimates that between 10.14 million and 12.16 million laborers would lose their jobs amid lockdowns.
PIDE, a government institution, maintains that between 12.33 million to 18.53 million people will be laid off in a situation where moderate to complete lockdown restrictions are imposed.
Pakistan is giving incentives, including loans to businesses, to convince the organization to retain workers and employees and prevent layoffs.
The country’s central bank on Wednesday enhanced the incentive to businesses, which are active tax payers, by reducing the markup rate to 3 percent from previously 4 percent.
“Now the State Bank of Pakistan will provide refinance to banks at 0%. This also increases the gap between the rates charged to active tax payer and the non-tax payers businesses, as the latter can be charged an end user markup rate of up to 5%,” the SBP said in its statement.