Tokyo, Nov 21 (IANS): Japanese Prime Minister Shigeru Ishiba's Cabinet is set to approve a 39 trillion yen (about $252 billion) economic package to support consumer spending, as a measure to tackle surging prices, local media reported on Thursday.

The package will include subsidies to cushion high electricity, gas and gasoline prices and deliver cash handouts to low-income households, Xinhua news agency reported quoting the Kyodo News, citing sources familiar with the matter.

The Cabinet plans to formalise the stimulus measures on Friday, with a plan to compile a fiscal 2024 supplementary budget with around 13.9 trillion yen in general-account expenditure to fund its envisioned package.

The package will also feature a plan to raise the tax-free income threshold, ceding to a demand from an opposition party, whose votes are needed for the ruling coalition to pass the measures, the report said.

The ruling coalition of the Liberal Democratic Party and its partner Komeito, which lost its majority in last month's general election, accepted a request from the Democratic Party for the People to raise the nontaxable income level from the current 1.03 million yen in order to win its backing for the budget bill passage.

The opposition party seeks to lift the ceiling to 1.78 million yen to boost consumption, but the government estimates the proposal could reduce annual tax revenues by an estimated 7 trillion to 8 trillion yen.