The Economic Coordination Committee (ECC) of the federal cabinet on Thursday decided to continue providing a wheat subsidy to residents of Gilgit-Baltistan, creating space for the move by reducing budgets of some ministries in accordance with conditions imposed by the International Monetary Fund (IMF).
Gilgit-Baltistan has faced nearly a month of protests over the withdrawal of the subsidies, posing a law and order concern, with the local government failing to resolve the situation without vowing to restore the subsidy. During the meeting, the participants were informed that the GB government had committed to gradually increasing the price of wheat to Rs. 52/kg to reduce the quantum of subsidies, but had faced widespread protests when the price hit Rs. 36/kg. Taking note of the situation, the Finance Ministry said it could not extend the subsidy in light of IMF conditions, adding the only option was to make technical supplementary grants by diverting funds from other ministries.
Chaired by interim Finance Minister Shamshad Akhtar, the ECC also approved electricity contracts’ transition from the London Inter-Bank Offer Rate (LIBOR) to Secured Over Night Financing Rate (SOFR). Under a decision of the UK’s Financial Conduct Authority, the LIBOR system of benchmarking financial transactions expired on June 30 and was replaced with the SOFR system. The Power Division, however, had contracts with foreign private contractors that required transitioning to the new system despite reservations of Chinese investors.
The meeting also approved a series of supplementary grants, including Rs. 38.856 million for Institutional Reforms Cell from the Cabinet Division and the import of Sahiwal Bull from Pakistan as semen donors for National Artificial Insemination Program from the Ministry of Commerce.
It further approved a Rs. 1.59 billion supplementary grant to the Finance Ministry for the rehabilitation of flood damaged rural roads in Khyber Pakhtunkhwa through counter value fund deposited under Japanese grant aid, and provision of clean drinking water in Model Areas UC 99, 100 and 101 Lahore through counter value fund deposited under Japanese grant aid.