SBP’s initiatives to help prevent unemployment: PM Imran Khan

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ISLAMABAD – Prime Minister Imran Khan Saturday said the government is taking various policy initiatives including incentives to businesses, Ehsaas Emergency Cash Programme, and jobs to daily wage earners under the Ten Billion Tree Programme to balance out the impact of coronavirus in the country.

In a series of tweets, the Prime Minister said that the government’s policy is aimed at striking a balance between protecting people through a targeted lockdown and protecting the vulnerable and the needy.

“The Ehsaas Emergency Cash Programme is underway. Today, the State Bank of Pakistan (SBP) has announced incentives for businesses. We are seeking to offer business incentives,” Prime Minister said.

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Imran Khan said the Ehsaas Emergency Cash Program is underway and the SBP is offering business incentives with tax refunds and opening up the construction sector while keeping the agricultural sector open. The Prime Minister said SBP’s initiatives for businesses during the COVID19 will help keep businesses afloat and prevent massive unemployment.

“With tax refunds & opening up the construction sector while keeping the agriculture sector open. SBP’s initiatives for businesses during the COVID19 will help keep businesses afloat & prevent massive unemployment,” he added.

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In addition to this, the Prime Minister said that the government is also employing a number of daily wagers in the Ten Billion Tree Campaign to bring a positive impact on lives and the planet simultaneously. “Every initiative counts in the time of COVID19,” he asserted.

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On Friday SBP had announced the Refinance Scheme for Payment of Wages and Salaries to the Workers and Employees of Business Concerns to support the employment of workers in the face of economic challenges posed by the spread of COVID-19.

According to SBP press release issued in Karachi, the core objective of this temporary refinance scheme is to incentivize businesses to not lay off their workers during COVID-19 Pandemic. It said the scheme will be available to all businesses in Pakistan through banks and will cover all types of employees including permanent, contractual, daily wages as well as outsourced workers.

The scheme will provide financing for wages and salaries expense for three months from April to June 2020 for those businesses which do not lay off their employees for these three months. “The mark-up on the loans under this scheme will be up to 5pc. Borrowers that are on the active taxpayers list will be able to get loans at a further reduced mark-up rate of 4pc. The scheme has been designed to give preference to smaller businesses”, read the SBP press release.

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It further said that businesses with a three-month wage and salary expense of up to Rs200 million will be able to avail the full amount of their expense in financing while those with a three-month wage and salary expense of greater than Rs500 million will be able to avail up to 50pc of their expense. Businesses in the middle category will be able to avail up to 75 percent of their three months’ salary and wage expense.

The banks, according to the press release, will not charge any loan processing fee, credit limit fee or prepayment penalties for loans under this scheme. A grace period of six months will be allowed to the borrowers while the repayment of the principal amount will be made in two years. Banks will provide weekly reporting to the SBP on the take up of the scheme and in particular the reasons for any denials of financing requests under this scheme.

Later, talking to a private TV channel SBP Governor Dr Reza Baqir in the evening said that slashing the interest rate by 225 basis points is the second major reduction in the world. SBP Governor hoped that these actions would bring the recession level down, arguing that the government’s priority is to kick start the process of development and to show stability in the job market the governor said that the current statistics for inflation suggest that the prices would come down in days to come.

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Claiming the reduction in prices in the last couple of months, he said that the central bank decides about interest rate cuts on the basis of level of inflation. He said that the capital was flying out of all the emerging market.

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