ECC approves major supplementary grants, revised gas pricing

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Friday approved a wide range of Technical Supplementary Grants (TSGs), endorsed revisions to the natural gas pricing structure for FY2025-26, and gave in-principle approval for a landmark risk coverage scheme targeting small farmers and underserved areas.

Chaired by Finance Minister Senator Muhammad Aurangzeb, the ECC approved over Rs2.9 trillion in TSGs to meet expenditures across key ministries and sectors for the remainder of FY2024-25, Finance Division said in a press release.

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The most notable allocation includes Rs15.839 billion for the Ministry of Defence to cover shortfalls in pay and allowances, as well as to settle dues under the Prime Minister’s compensation package for martyrs of the recent Pakistan-India war.

The ECC also made massive allocations to the Finance Division — Rs829.67 billion for domestic debt repayment and Rs1.774 trillion for foreign loan repayments — highlighting the government’s efforts to manage its public debt obligations.

Other significant TSG approvals include:

• Rs1.765 billion for the Frontier Corps in KP and Balochistan
• Rs5.5 billion for SUPARCO as rupee cover
• Rs300 million and other allocations for Islamabad Police and investigation facilities
• Rs254.57 million for incentivising PAS/PSP officers in Balochistan
• Rs117.97 million for upgradation of the Pakistan Petroleum Corehouse

The ECC also approved the Petroleum Division’s proposal for revising the natural gas pricing structure effective from July 1, 2025, in line with commitments under the IMF programme. While prices for household consumers will remain unchanged — except for fixed charges — tariffs for bulk users, power plants, and industrial consumers will rise by an average of 10%.

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Additionally, the ECC reviewed a proposal from the Ministry of National Food Security and Research regarding sugar imports. While no decision was made, a 10-member steering committee, led by the Federal Minister for MNFSR and comprising key officials, was constituted to examine the matter and return with recommendations.

The committee also deliberated on reforms in home remittances incentive schemes. The State Bank of Pakistan and Finance Division were directed to present a detailed impact-based roadmap by July 31.

Crucially, the ECC gave in-principle approval to a new risk coverage scheme for small farmers.

Set for launch on August 14, 2025, the scheme is expected to bring 750,000 new agricultural borrowers into the formal credit system and generate Rs300 billion in lending over three years.

The budgetary requirement for meeting risk coverage and operational cost of the banks is estimated to be Rs37.5 billion, spread over FY2027 to FY2031.

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The ECC meeting was attended by several key federal ministers, including Minister for Power, Sardar Awais Ahmed Khan Leghari, Minister for Petroleum Ali Pervaiz Malik, Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan, and senior officials from various ministries and divisions were also present.