'Budget dashes hopes of industrial sector'

The industrialists, heavily criticising the federal budget 2009-10, said that it dashed all hopes of industrial sector, because no revival package for the ailing industry has been announced nor any proposals of the sector given due consideration in the budget. Chairman, Korangi Association of Trade and Industry (KATI), Mian Zahid Hussain, commenting on the budget said that it is a hapless budget present in the history of Pakistan.
It was long standing demand of industrial sector that measures should be adopted to reduce cost of doing business and reduction of markup, but no measure has been taken in budget in this regard, he added. Instead of reducing burden of taxes and utility charges government has imposed additional burden of Rs 340 billion, he said.
He said that prices of almost all the products either produced locally or imported would go up considerably, adding that a wave of price hike from July 2009 may lead to increase more unemployment, creating law and order problems. Criticising the government Mian Zahid said that government has not been able to fulfil its commitment to provide special security squads in order to maintain law and order in the industrial zones, moreover, he said that withdrawal of subsidies on electricity and gas on industry is extremely disappointing.
He said that this decision would result in closing down more industries and raising unemployment. Pattern in Chief, North KATI, Caption Moiz Khan recalled meetings held with Advisor to Prime Minister on Finance, Shaukat Tarin and said that Tarin had assured that income tax on agriculture income would be imposed in the budget, but the promises have not been fulfilled.
Criticising imposition of carbon tax on petroleum products he said that it would lead to increase oil and gas prices in the country. He said that around 49 per cent industries are either closed or operating on reduced capacity due to high cost of doing business.
Moiz Khan further said that there is nothing for general public in the budget and feared that there would be more incidents of committing suicide with the increase of prices of essential goods.
He said that taxation measures adopted in the budget would lead to increase prices of all goods by 15 to 20 per cent. Chairman, Federal B area Association of Trade and Industry (FBAATI), Idrees Gigi appreciated efforts, made to increase tax net by including stock brokerage, insurance companies, bank services. He further criticised the government that it did not impose income tax on income from garniture in the budget and said that imposition and paying income tax will not lead to price increase.
However, keeping in view other factors like war against terrorism is going on, country facing million of displaced peoples, economic slow down, harsh IMF conditions and other serious problems he said that budget should not be considered very hard. He hoped that the government would soon announce policy for the revival of industrial sector. Meanwhile, Pattern-in-Chief, Post Qasim Association of Trade and Industry (PQATI), Naeem Ilyas Khannai said that budget is overall status quo and based on IMF agreed framework.
He said that increase in electricity tariff and withholding tax on imports will increase cost of doing business, no new initiatives for lowering tax rates, GST and Income Tax, no political will for imposing taxes on agriculture/ agri businesses, CVT on industrial properties should not be increased.
He said that no hike of minimum wages is appreciative move but increase in income tax on salaried class is discouraging move. Effective and proper utilisation of allocated PSDP will help improve social indicators. Meanwhile in a joint statement, the Patron In-Chief, Korangi Association of Trade and Industry (KATI), S M Muneer, Vice Chairmen, Johar Ali Qandhari, Ehtishamuddin and members of managing committee, welcoming the decision to continue with the status of export sector as zero-rated, said that the industrial sector has not given any revival package or tax relief in the budget as industrialists were expecting.
They said that industrial sector is the largest employer of skilled workers and skyrocketing prices of utilities is crippling the manufacturing sector and the industries are compelled to shut down due to incapability of competition with the outer world. They said that the entire world is giving stimulus plans to rescue the industry but in Pakistan, it left behind to struggle for its survival.
They said that agriculture sector has been given incentives, which should be welcomed but the industry and export sectors have been ignored. The Chairman, Pakistan Tanners Association (PTA), Sh Afzal Husain, Chairman, FPCCI, Environment Committee, Gulzar Firoz, said that the government did not give any priority to the export sector despite the fact that export oriented industries are extremely in need of the stimulus package considering the global economic meltdown.
They said that all high ups in ministry of finance had committed to giving a number of incentives for the exports sector, especially, for the leather sector, adding that there was no mention of Rs 40 billion for industrial sector but nothing has been elaborated in this regard.
Chairman, Pakistan Leather Garments Manufacturers and Exporters Association (Plgmea), Fawad Ijaz Khan said that as far as export sector is concerned nothing has been announced to improve foreign exchange earnings. He said that the government has wisely announced to continue with zero-rating of export sector but there should be some stimulus package for export sector in order to rescue dwindling exports.
The Chairman, Pakistan Bedwear Exporters Association (PBEA), Shabir Ahmed expressed his sheer disappointment over ignoring export sector. Commenting on the budget, he said that nothing has been announced to rescue the export or industrial sector. Shabir said that withdrawal of subsidies on gas and electricity on industrial sector would be extremely damaging to export-oriented industry.