Prime Minister Announces Major Relief Package for Pakistani Industries and Exporters

Prime Minister Shehbaz Sharif announced a significant relief package for industry and exporters on Friday. The package includes a Rs4.04 per unit cut in electricity tariffs, lower wheeling charges, cheaper export financing, and issuance of special blue passports for leading exporters.

Speaking at an awards ceremony for top exporters, the prime minister highlighted several measures. He said electricity wheeling charges would be reduced to below Rs9 per unit while the export refinance scheme rate had been lowered from 7.5% to 4.5%. The government has allocated Rs1,052 billion for the export financing scheme with Rs900 billion already utilized.

Earlier, exporters received a three percent subsidy on the State Bank of Pakistan’s policy rate which was now further reduced. PM Shehbaz mentioned that future foreign investment would only be encouraged in export-oriented projects to generate foreign exchange and strengthen reserves.

He announced the issuance of blue passports for two years to exporters honored at the ceremony as incentives for promoting export-led growth. The prime minister stressed that Pakistan’s economic revival and long-term stability depended on this approach, noting it was a “win-win strategy” for exports and investment.

Speaking about the severe economic crisis in June 2023 where inflation stood at 32 percent and policy rate peaked at 22 percent, he said the economy had since stabilised. Inflation is now single-digit, with the policy rate reduced to 10.5%, and foreign exchange reserves doubled over the past three years.

The government aims to reduce reliance on external debt, citing that nations losing this support lose respect. Acknowledging economic support from China, Saudi Arabia, the UAE, and Qatar during the crisis, he urged industries not to withhold taxes collected from consumers.

He highlighted action against sugar mills generating Rs50 billion in additional revenue over the past year, curbs on petroleum smuggling adding around Rs125 billion annually through the Petroleum Development Levy. Security forces’ strict actions against smuggling networks in border areas also played a role.

Shehbaz emphasized the importance of small and medium enterprises (SMEs), calling for banks to expand lending to SMEs. He said Pakistan must abandon its boom-and-bust economic model that repeatedly triggers balance-of-payments crises.

On taxation, he warned industries not to withhold taxes collected from consumers. The prime minister reiterated his government’s resolve to reduce external debt reliance and called for increased investment by the business community, assuring them of their recommendations’ implementation.

The Commerce Minister Jam Kamal Khan highlighted Pakistan’s economic resurgence due to its engagement with the business community during FY2024-25. PM Shehbaz presented awards to top 30 exporters and leading bankers at a ceremony for their contributions to the economy in FY2024-25.