The federal government has agreed to deregulate prices of locally manufactured agriculture tractors despite strong opposition by the Ministry of Food, Agriculture and Livestock (Minfal), well-placed sources told Business Recorder.
The sources said that this issue was being discussed at different forums for the last two years as local manufactures especially Millat Tractors Limited (MTL) had developed good contacts in the federal government.
The Ministry of Industries and Production was advocating deregulation of tractor prices but Minfal was of the view that such a move would hurt poor farmers who are always at the paying end.
The sources said that the federal government had given sales tax exemption on spare-parts of agriculture tractors being manufactured by the local industry, subject to the condition that the exempted tractors are sold at a price agreed with the government. The Industries Ministry last fixed tractor prices in 2002.
According to sources, imported tractors were zero-rated for sales tax but there was no pre-condition of prices fixation in consultation with the federal government. As such, the condition for the local manufacturers to seek government's concurrence for price-fixation was discriminatory.
The sources said that MTL, Al-Ghazi Tractors and Universal Tractors Limited had approached the Ministry of Industries for increase in prices or to deregulate the prices on the basis of hike in costs of various inputs affecting the production cost of tractors.
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