ISLAMABAD - The Economic Coordination Committee (ECC) of the Cabinet on Friday approved much delayed Automotive Development Policy 2016-21 aimed at facilitating higher volumes, better investment, enhanced competition and better quality with latest technology.

The ECC, which met under the chair of Finance Minister Ishaq Dar, has also approved levy of 15 percent additional regulatory duty on import of finished iron and steel products till 30th June 2016. ECC also approved levy of regulatory duty @10 percent on aluminum alloy. The decision would help in generating Rs1.7 billion for the government in remaining few months of the ongoing financial year.

The top economic decision making body of the country, the ECC allowed increase in the limit of the GoP guarantees for PIA from Rs. 146 billion to Rs. 151 billion to help the National Carrier pay its liabilities. The ECC gave approval for extension in the date for reduced withholding tax @ 0.4 percent for non-filers under section 236p of the Income Tax Ordinance, 2001 up to 31st March, 2016.

The Committee after detailed deliberations approved the Automotive Development Policy 2016-21. The policy aims to facilitate higher volumes, better investment, enhanced competition and better quality with latest technology. The Policy also aims to create a balance between industrial growth and tariffs to ensure sustainability for all stakeholders. It would also ensure consumer welfare besides aiming at providing policy consistency and predictability for investors. The Automotive Development Policy (ADP) 2016-21 will be formally launched on Monday, 21 March, 2016.

In October 2013, the ECC constituted a committee to propose the new automobile policy. The government took two and half years to approve the policy. The government under new Auto policy would give incentives to new the entrants in this sector, as duty on localised parts will be 10 per cent whereas duty on non-localised parts will be 25 per cent for five years, however, no localisation plan is in hand for the new entrants. This implies that after five years, tariff for new entrants will be doubled. Similar incentives are being offered for revival of closed units for three years.

However, the government has not offered any incentive to the existing Original Equipments Manufacturers (OEMs). Under the policy, the amount of advance payment will be limited up to 50 percent of the total price. Price and delivery schedule, not exceeding two months will be firmed up at the time of booking. Any delay over two months will result in a discount @ Kibour + 2 per cent prevailing on the date of final delivery / settlement from the final payment; this will help shorten delivery lead time.

The government in the policy has also offered incentives to revive closed units for three years.

Meanwhile, on the proposal submitted by the Ministry of Petroleum and Natural Resources, ECC allowed 45mmcfd raw gas from M/s OGDCL’s Qadirpur Gas Field to be allocated to Ms TNB LPL up to year 2025-26 enabling the plant to continue to provide 211 MW net power to the National Grid.

The ECC considered and approved the proposal submitted by Ministry of National Food Security and Research for extension in the date for export of wheat/wheat flour (aata) till 15th June 2016. The ECC had detailed discussion on proposal concerning RLNG based IPPs submitted by Ministry of Water and Power. The forum approved extension in Bid submission date for 1000 MW R-LNG based IPPs initiative till 5th of April.