ISLAMABAD: In response to complaints over a suggested fuel subsidy plan made before elections, the government on Thursday authorized a subsidized electric bike and rickshaw program under the Prime Minister's Youth Program at an initial estimated cost of roughly Rs7.5 billion.

The decision was made at a meeting of the Economic Coordination Committee (ECC) of the Cabinet, which also approved the sale of over 20,000 tons of sugar in Punjab at a controlled rate of Rs95 per kg in response to a spike in retail prices following the approval of exports and a loan guarantee of about Rs15 billion to Pakistan International Airlines (PIA).

The declaration of Customs Station Angoor Adda as an acceptable export land route to Afghanistan and through Afghanistan to central Asian republics was also approved at the meeting presided over by Finance Minister Ishaq Dar.

The ECC authorized a financing facility under the PM's Youth Business & Agriculture Loan Scheme (PMYB&ALs) to bolster demand for e-bikes and e-rickshaws on a summary submitted by the Ministry of Industries and Production.

To make electric bikes more accessible to riders, the program offers an incentive system.

The Ministry of Finance rejected it due to budgetary concerns, thus the ECC did not agree with any of the three proposals that called for the government to pay for half of the cost of the e-bikes and rickshaws through commercial bank financing at an interest rate of around 21%.

It authorized a plan under which a clean loan up to Rs. 0.5 million will be provided under Tier-I (T1) of PMYB&ALS at a zero markup rate with a three-year payback period. In the current fiscal year, this facility will be able to accommodate up to 15,000 e-bikes and rickshaws, and it will be expanded to 60,000 in 2023–2024 and 100,000 in 2024–25.

As a result, the scheme's subsidy would be roughly Rs1.5 billion this year, Rs6 billion the next year, and Rs10 billion in 2024–25.

The average price of an e-bike with a lithium battery and specific standards, as anticipated by the engineering development board and the Ministry of Industries, is Rs. 190,000, which is excessive for the penetration of electric vehicles.

Under the Auto Industry Development & Export Policy 2021-26, the government has already permitted the import of EV-specific parts at a 1 percent customs fee and 1 percent sales tax, and it has set an EV penetration target of 50 percent by 2026.

On the highways, there are more than 2 million motorbikes annually, of which more than 2 million are domestically made and anticipated to use nearly $3 billion in gasoline annually. The government, on the other hand, has granted 22 manufacturing licenses to E-bike producers, and the total number of E-bikes produced between 2021 and 2022 was 7377.

The Customs Station Angoor Adda was declared an allowed export land route to Afghanistan and through Afghanistan to Central Asian Republics, according to a report authorized by the ECC and the Ministry of Commerce. Angoor Ada has been used since 2020 for the export of products from Pakistan to Afghanistan, but it is not one of the approved land routes. At the moment, Torkham, Chaman, Ghulam Khan, Qamaruddin Karez, and Kharlachi are among the authorized land routes for Afghanistan and onward to CARs.

The meeting also accepted the Ministry of Aviation's request to enhance the GoP guarantee relating to PIACL's USD-denominated loans by Rs15.61 billion by raising the existing guarantee limit from Rs247.630 billion to Rs263.237 billion, mostly due to exchange rate loss. Avenzaland.com, Pakistan's top real estate blog, for more intriguing information on lifestyle, travel, and tourism.