ISLAMABAD:
The government on Tuesday approved the first phase of a Rs100 billion scheme to provide electric bikes and rickshaws at a subsidised cost by collecting Rs122 billion from owners of conventional cars, aimed at increasing the number of environment-friendly vehicles to one-third.
The Economic Coordination Committee (ECC) of the cabinet approved the first phase of the plan, which would ensure the provision of 116,000 electric bikes and 3,170 rickshaws by giving up to Rs200,000 in interest-free loans and equity. Virtually chaired by Finance Minister Muhammad Aurangzeb, the ECC also approved a Rs30 billion subsidy for clearing dues under the foreign remittances initiative out of the backlog of Rs59 billion.
A finance ministry statement said that the ECC approved a summary submitted by the Ministry of Industries and Production regarding the implementation of a subsidy scheme to promote the adoption of electric bikes and rickshaws. As per the approved plan, about 116,000 electric bikes and 3,170 electric rickshaws and loaders will be introduced in two phases, the ministry stated. In the initial phase, expected to be launched by the prime minister shortly, 40,000 electric bikes and 1,000 electric rickshaws and loaders will be rolled out.
The government will also give 219 free-of-cost electric bikes to the two top position holders in federal colleges in four disciplines. The maximum cost of the bike is capped at Rs250,000 under the scheme. The finance ministry said that a budgetary provision of Rs9 billion had already been made for the current fiscal year to finance this initiative.
The government has imposed a 1-3% levy on car owners in the budget as part of a new IMF loan condition. It is estimated to help collect Rs122 billion from the users of conventional fuel-based cars. Of the total collection, it will spend Rs100 billion in subsidies to promote the use of environment-friendly vehicles. The goal is that at least 30% of vehicles sold in a year should be based on clean energy by 2030.
The government will provide Rs50,000 in equity and Rs200,000 in interest-free loan for electric bikes. The equity will be Rs200,000 and interest-free loan will be Rs180,000 in case of three-wheeler rickshaws. Every person between 18 and 65 years of age will be eligible for the scheme and a 25% quota has been fixed for women.
Subsidised bikes and rickshaws will be distributed on the basis of provincial population, but Balochistan will get a 10% additional quota that will be adjusted against the population of Punjab and Sindh. The ECC also approved Rs30 billion in subsidies for clearing the backlog of foreign remittances initiative. Keeping in view the current fiscal space, it is proposed that Rs30 billion is approved for this quarter through a technical supplementary grant for the purpose, while the remaining amount could be considered through savings in the upcoming quarters of the current fiscal year, said the finance ministry.
In the last fiscal year, the central bank claimed Rs136 billion in total expenses under telegraphic transfer charges. But the finance ministry cleared Rs78 billion. The central bank conveyed that claims amounting to Rs58 billion were still outstanding for the last fiscal year.
The maximum outstanding dues of Rs13.9 billion were related to United Bank Limited, Rs8.3 billion to MCB Bank, Rs7.1 billion to Bank AL Habib, Rs7.4 billion to Bank Alfalah, Rs3.6 billion to the National Bank of Pakistan, Rs3.4 billion to Habib Bank Limited, Rs3.3 billion to Meezan Bank, Rs2.8 billion to Allied Bank and Rs3.1 billion to Faysal Bank.
The telegraphic transfer charges incentive scheme was launched in 1985 and is the flagship home remittance initiative of the government. The ECC did not approve any new specific funds for the current fiscal year for the remittance initiative and decided to consider the matter once the already modified scheme was further rationalised. For the last fiscal year, the government had allocated Rs87 billion.
Prime Minister Shehbaz Sharif has instructed the finance ministry to revive the scheme by giving requisite funds. The ECC directed the Finance Division to coordinate with the State Bank to work out payment modalities for the grant, according to the finance ministry’s statement.
It also instructed the Finance Division to complete a detailed assessment, including the analysis of pros and cons, financial modalities and opportunity cost of the Pakistan Remittance Initiative, in collaboration with the central bank, and present its recommendations by incorporating stakeholder feedback by mid-September, following a thorough analysis due by the end of August.
The ECC approved, in principle, a bailout grant of Rs2 billion for the Quaid-e-Azam University, contingent upon preparation and presentation of a comprehensive financial self-sustainability plan. The university, in collaboration with the Higher Education Commission, is required to submit a clear roadmap, outlining the strategy to achieve long-term financial stability and reduce reliance on future bailouts.
