Extension in levy of NJ surcharge approved by ECC

The Economic Co-ordination Committee (ECC) of the Cabinet has approved an extension in the levy of Neelum Jhelum (NJ) surcharge from electricity consumers for the next 18 months with an expected revenue collection of Rs 9 billion. The proposal to extend the closing date for the collection of Rs 010/kWh up to June 2018 was submitted by Ministry of Water and Power to the ECC meeting chaired by Finance Minister Ishaq Dar on Wednesday. Previous closing date for collection of surcharge was December 31, 2016.

The ECC had also approved Rs 180 billion incentive package for exporters for a period of eighteen months subsequent to its announcement by Prime Minister Nawaz Sharif with the objective of boosting the country''s exports that are posing a serious challenge to the balance of payments position.

An official of Finance Ministry said the recent decline in exports and their impact on the balance of payment position was a matter of grave concern for the government. He further stated that an increase in exports was very critical as repayments to external creditors were soon going to be due.

Finance Division informed the ECC that Prime Minister''s package of incentives for exporters would be applicable for the period from January 16, 2017, till June 30, 2018. The incentives for fiscal year 2017-18 would only be available to those exporters who would achieve an increase of 10 percent in their exports as compared to their exports for fiscal year 2016-17.

In pursuance of the Council of Common Interests (CCI) decision, the ECC approved the proposal of Ministry of Water & Power for issuance of Letter of Comfort or government guarantee by Finance Division to WAPDA for settlement of Net Hydel Profit claims of the Punjab government. The meeting was also given a briefing on key economic indicators, including a review of products prices, inflation, commodity stock position, energy figures, foreign exchange reserves, foreign investment, trade performance and tax revenues.

The ECC was informed that headline inflation measured at 3.7% in December 2016 against 3.8% in November 2016. The reported stock of wheat as on January 3, 2017, was 7.5 million tons - adequate for daily releases to mills by Provincial Food Departments and PASSCO. The Finance Division informed the ECC that the stock of various POL products averaged 34 days on January 10, 2017; and production of the Large Scale Manufacturing sector stood at 2% in July-October FY 2017. ECC was apprised that worker remittances received during July-December FY 2017 amounted to US $9,459 million and gross foreign exchange reserves stood at US $23.183 billion as on January 9, 2017.