Government to Launch Chota Karobar Imdadi Package to Support Small Businesses
The Economic Coordination Committee (ECC) has approved the Chota Karobar Imdadi package, a comprehensive support package worth Rs. 50.69 billion, aimed at providing indirect financial assistance to Small and Medium-sized Enterprises (SMEs) through prepaid electricity bills.
Benefits and Eligibility
The package is expected to benefit over 3.5 million small businesses, including retailers and industrial consumers, with a connected load of up to 5 kW and 70 kW, respectively. Approximately 95% of commercial consumers and 72% of industrial consumers with a connected load of up to 5 kW and 70 kW, respectively, will receive financial support under this package.
- Commercial consumers with a connected load of up to 5 kW will receive support up to Rs. 100,000 for three months.
- Industrial consumers with a connected load of up to 70 kW will receive support up to Rs. 450,000 for three months.
Package Details
The base period for estimating electricity consumption is May to July 2019, and the corresponding average will be used for meters with no consumption data available for the entire base period. To avail of the package, businesses will need to pay their prepaid electricity bills or total bills for three months during the base period. The extended financial support will last six months from May/June 2020.
Additional Support Measures
In addition to the Chota Karobar Imdadi package, the ECC has also approved a Rs. 2.5 billion block subsidy for Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan (GB) for payment through special rules. The Ministry of Industry and Production has been asked to provide similar support packages to the agricultural sector, including agricultural wells, as well as to transport companies and the microfinance sector.
Support for Employment and Preventing Layoffs
The ECC has also approved a Rs. 30 billion loan for the State Bank of Pakistan’s Refinancing Program, a risk-sharing facility to support employment and prevent layoffs. The program will extend funding to companies with a maximum turnover of Rs. 2 billion, while the government will pay 40% of the initial loss of the distributed portfolio to eligible borrowers in the event of repayment after being classified as “loss” according to the relevant SBP prudential regulation.
Debt Restructuring and Border Security
The ECC has granted in-principle approval for the restructuring of Pakistan’s external debt, using G-20 debt relief and cooperating with bilateral donors to suspend debt individually. Additionally, the ECC has approved the allocation of additional resources in the form of an additional technical grant of Rs. 3.02 billion for enclosing the Pakistan-Afghanistan border.
Frequently Asked Questions (FAQs)
- Q: Who is eligible for the Chota Karobar Imdadi package?
- A: Small businesses, including retailers and industrial consumers, with a connected load of up to 5 kW and 70 kW, respectively, are eligible for the package.
- Q: How can businesses avail of the package?
- A: Businesses will need to pay their prepaid electricity bills or total bills for three months during the base period to avail of the package.
- Q: What is the duration of the extended financial support?
- A: The extended financial support will last six months from May/June 2020.
