Tractor making industry at the verge of closure

Al-Ghazi Tractor Limited has been closed for 2 months, and Millat Tractor Ltd is working on a 4-day week as in the month of August only 800 tractors were produced against a production figure of 7,000 tractors in August 2010, industry sources told Business Recorder here on Sunday.
They said that tractors sales have been dropped almost 90 percent in the country as the farmers are cash starved after fall of cotton prices and other agriculture commodities.
When contacted vice Chairman PAAPAM Syed Nabeel Hashmi gave three reasons for tractor sales crash, primarily it is the affect of GST which has raised the price of the 50 Hp tractors by Rs 100,000 and the 85Hp tractor by over Rs 200,000.
The second reason given by Hashmi is the lack of clarity and delay on the part of the government in amending the current 16 percent GST regime. Farmers are holding back their purchases in the hope that government will provide relief by abolishing or reducing the GST.
Thirdly, it is the halt in agri loans to the farmers by ZTBL. If decisions are not forthcoming soon, Hashmi apprehended, it would be the end game for 300 odd vendors. This little known industry employs 30,000 people directly and an estimated investment of 20 billion is looking towards the government to give it a new lease of life so that the tractor assembly lines start moving again, he added.
Hashmi pointed out that In India across the board 4-5 percent GST is levied on tractors.
Last year 80,000 tractors were produced in the country and government collected in the withholding tax head alone Rs 14000-20,000 per tractor which amounts to over a one billion Rupees in revenue.
It is pertinent to add here that the powerful textiles industry was able to get GST regime reverted on their products within days of its imposition, whereas the tractor sector has been left in the back burner for over 2 months now.
Hashmi said PAAPAM once again demands early clarity of the position/decisions on GST for smooth rolling of the tractor industry wheel because any further delay will make its revival impossible.
It may be recalled that an adjournment motion on the closure of tractor industry due to GST imposition was moved by Raja Mohammad Asad Khan and four other MNAs on 17 August in the 34th session of the national assembly for detailed discussion on this national issue.