SCCI rejects federal budget

The Sarhad Chamber of Commerce and Industry (SCCI) has rejected the Federal Budget 2009-10, saying that it is neither people nor business friendly as no benefit has been given to both segments of the society. Commenting on the federal budget, president of SCCI, Sharafat Ali Mubarak, was critical of the increase in the withholding tax on the import of material from 2 per cent to 4 per cent.
The hike in the ratio of the withholding tax, he said would increase the cost of production in the manufacturing units. The expected increase in the electricity tariff would further put the manufacturers in trouble. Mubarak termed the sanctioning of Rs 70 billion for the Benazir Income Support Programme (BISP) as a wrong step that, according to him, instead of alleviating poverty would increase it. He suggested that the government should have spent this amount on the promotion of industries for generation of employment opportunities.
Furthermore, he said the business community since long had been demanding of the government to declare the province a war-affected area, but the demand had been neglected in the budget. Though the government, he said, had increased exemption from income tax on the income up to Rs 0.2 million, it was very low in the prevailing high inflation.
The government, he said, should have exempted the income up to Rs 0.4 million of the income tax. The SCCI was also annoyed with the maintaining of the Sales Tax rate at 16 per cent. He said business community had suggested for decreasing the rate to 10 per cent for bringing more people in the tax net.
Chairman of the All Pakistan Commercial Exporters Association (APCEA), Zia-ul-Haq Sarhadi, criticised the budget as deficit one carrying pretty dreams for its arresting. He said the government had last year pledged that the deficit would be contained but it climbed during the year.
An important feature of the federal budget, he said was the 9 points agenda for stability of economy, poverty alleviation, stability in agriculture, up-gradation of the industries to international standard, promotion of investment, strengthening of infrastructure, increase in energy production, human development and access to justice. The second positive step in the budget was the pledges for increasing tax net. For this purpose, he said, business community was making proposals and recommendations to the government for the last several years.
Sarhadi welcomed special measures initiated for the development of agriculture sector in the budget. He also appreciated the project of 'white revolution' announced by the Prime Minister, and called for the implementation of the scheme in letter and spirit. He termed the budget as a pleasant document, compiled after taking into consideration the prevailing situation in the country.
For the alleviation of poverty and support for poor families, the fund of the BISP had been doubled, besides good news of the announcement of special allowance and increase in the salaries of government employees.
Despite criticism by the business community, Dr Abdul Mateen, a known economist and former Vice Chancellor of the University of Peshawar said the budget was not in any way visionless and directionless, and termed it as a very realistic, productive and pragmatic budget.
The budget, he said comprising affirmative action for expansion of industrial capacity, revival of sick industrial units and exploration of the potentials for establishment of new manufacturing units was timely. "The advance of credit, equity finance and availability of gas and electricity to the industrial units on preference would go a long way in the reactivation of the manufacturing sector. An equally positive programme is indicated for agricultural development, food security, and expansion of livestock and production of high value crops. Work in calamity relief operation, disaster operation and sport is a positive step forward."
He said it was good to know that non-productive subsidies were minimised or abolished in some cases. Policy recommended for the revival of the industrial development and pro-business attitude was a step in right direction. Notwithstanding the positive aspect of the budget was less status quo. There were mere additions, subtractions and deletions to allocation of resources and mobilisation of revenue. No step was taken for self-reliance as heavy dependence was made on foreign aid and inflow of finances.