PTI govt okays Rs11b for military allowances

Also allows duty-free import of cotton


Shahbaz Rana December 30, 2019
An AFP file photo of Pakistani soldiers.

ISLAMABAD: The government on Monday approved a supplementary budget of Rs11.7 billion to pay for the military’s allowances and allowed duty-free import of cotton to meet local requirements.

The Economic Coordination Committee (ECC) of the Cabinet’s meeting – with Adviser to the PM on Finance Dr Abdul Hafeez Shaikh in the chair – approved three technical supplementary grants valuing Rs11.7 billion for Special Security Division (North), internal Security Duty Allowance and construction of bunkers, according to the Ministry of Finance handout.

Of the total grants, Rs6.2 billion is for the recurring cost of Special Security Division of Pakistan Army during current financial year 2019-20. The division has been established to provide protection to the China-Pakistan Economic Corridor (CPEC).

The amount approved for internal Security Duty Allowance is Rs4.966 billion and for the construction of Community Bunkers it is Rs500 million, the finance ministry stated.

Last month, Shaikh, who is also the chairman of ECC, had deferred the approval of all three grants and asked the General Headquarters to meet the expenses from the regular defence budget. However, the matter was again brought before the ECC.

The Ministry of Finance did not disclose the heads from where the amount of Rs11.7 billion would be diverted to meet these expenditures.

Last month, the ECC had directed that the cost of providing protection to the CPEC and other important installations by the military should be made part of the regular defence budget instead of meeting it through supplementary grants.

The defence ministry had requested a supplementary grant for paying the recurring cost of the Special Security Division and internal Security Duty Allowance to the army troops deployed on the western border.

The ECC also decided to waive 10% duties and taxes on import of cotton besides authorising to import cotton through land route from Central Asia and Afghanistan. The decisions will take effect from January 15.

Pakistan faces cotton shortfall, as the production is expected to remain close to 10 million bales against the government’s target of 15 million bales.

So far, the ginning factories have received 7.9 million bales from farmers.

The ECC decided to withdraw the 3% regulatory duty, 2% additional customs duty and 5% sales tax on imported cotton from January 15, 2020, according to the finance ministry.

The decision was taken in light of the information provided to the ECC after the 1st Cotton Crop Assessment Committee’s meeting held on October 4, 2019, in which it was briefed that against the production target of 15 million bales for FY 2019-20, cotton production at the end of the year would be 10.20 million bales.

Shaikh was briefed that bulks of cotton would be lifted from local farmers by January 1, 2020 and the given exemption would not adversely affect the interests of local farmers. On the other hand, it was also assured by the ministries of commerce and national food security that the import would facilitate the textile sector exports which are showing a rising trend.

Shaikh, in the interest of local farmers, directed the Ministry of National Food Security and Research to devise a comprehensive policy in consultation with all relevant stakeholders to help improve cotton production locally and serve the interests of local farmers.

The chair directed that the policy be presented within one month to the ECC, stated the finance ministry.

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