The local holiday in Karachi on March 13th, resulting in the closure of commercial and service activities, will have an overall adverse effect on the revenue generation, which in the country is about Rs 1.5 billion a day, based on 300 working days.
This was stated by Engr. M.A.Jabbar, vice-president, Federation of Pakistan Chambers of Commerce and Industry (FPCCI), while talking to Business Recorder here.
The industrial city of Karachi has the responsibility to provide majority share in the tax revenue portion of the total revenue collection, he said, adding that the population of the country with 150 million people, to claim to be the fifth populous nation in the world in very near future, is facing a problem of rising trend of unemployment as well.
This could be assessed through the present trend of applications from 5000 persons for one job on average basis.
He said that the economy of the country, based on about US$ 500 per capita income, may not recommend going for holidays of the nature announced for witnessing the first ODI between Pakistan and India played at the National Stadium.
Asking the industrial activities to freeze through administrative orders is not a wise step. The assurance to keep unemployment under check to have minimum holidays in the country, keeping in view the type and level of economy we have.
The decision of declaring holiday in a situation in which the Sindh High Court and subordinate judiciary, financial institutions and other services are functioning, may be in isolation of the consideration that the open service providers shall see the absentia of the service seekers due to administrative declaration of the local holiday.
He said that of the total revenue targets, Karachi generates a considerable GDP portion in a day to the total of US$ 60 billion plus.
The Karachi portion in terms of tax revenue with the bench mark of 50 percent contribution to the exchequer on account of major industrial activities would otherwise amount to Rs 0.75 billion proportionate to GDP of a day of 100 million dollars of the city.
In this statistics, the major portion of exports is also covered besides domestic consumption to contain the inflation if there are more working days.
Jabbar said: "The competitive cost also increases for facing the challenges of products from other countries of similar nature in overseas markets and as well the share against imports of similar products also increases."
An interesting example would be that the utilities, like KESC, supplies electricity to industry based on part payment for fixed charges irrespective of working of industry.
The industrialists will pay for the fixed charges even when there is no consumption of electricity.
Besides the shrinkage of demand against supply also is to be the loss of KESC, which is already plagued with the type of working, requiring support financing from the revenue to the tune of Rs 15 billion.
He said that after the World War II, the Japanese were having more working hours, almost with no holiday, which gradually moved to relaxation, after the rehabilitation of economy.
"We should also not forget that a single day holiday has a big cost on the competitiveness of the products and it adds to the unemployment in specific of the contractual employment and hired services, which are time-based and metered and measured accordingly."
He said that a very simple arithmetic of exports of US$ 12 billion, assigning 30 percent share to Karachi comes to about US$ 3.5 billion yearly which on average daily basis is about US$ 12 million per day or Rs 700 million plus cost of products for exports, which provides in built input portion of labour employment, service employment and made no useful efforts, which are employed on long-term duration with unforeseen holidays of the type we had in Karachi on March 13th.
"The decision makers should consider all aspects seriously before making such pronouncements affecting the economy of the country with negligible volume of trade in comparison with many other like economies in the world," he said.
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