Textile sector should have been given incentives in the federal budget 2007-08 to compete in the international market and achieve its annual export target. Taniver Ahmed Sheikh, President, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said this while commenting on the budget on Saturday.
Government should have announced incentives for the textile sector because due to fierce global competition and higher cost of production as compared with the regional countries, adding that the textile sector was in quandary.
Considering global scenario it was imperative to adopt such policy that could provide the sector with a sustainable support for economic growth of the country.
He said that high mark up rate was another serious issue, which had to be dealt as priority matter. The investment of $5 billion during last five years has been made when the rate of mark up was only 4 to 5 percent, which has now reached 14 percent that should have been reduced. "If the mark up rate is not brought down, the survival of many industrial units will become elusive and could lead to their closure," he said.
However, the overall budget is 'business and people friendly', he termed and said that masses would be benefited by the special incentives. He appreciated the efforts for poverty alleviation and employment generation. Reduction in capital gains tax from 35 percent to 10 percent will encourage further investment. Introduction of BT Cotton is also a welcome step, he added. He said continuation of tax reforms would help increase confidence level of business community, adding that the community would also help Central Board of Revenue (CBR) in achieving set revenue targets.
FPCCI president claimed that about 90 percent budget proposals of the apex trade bodies had been accepted. Zubair Tufail, Vice President FPCCI hoped that ongoing reforms would enable industries to grow up further, besides achieving new revenue targets.
He expressed disappointment over government's negligence towards textile sector, hoping that the concept of group taxation would be successful. He said that increase in minimum wages to Rs 4,600 would give relief to poor people, adding that increase in salary and pension would also support workers and the retired employees financially.
S M Munir, former FPCCI president said that high mark up rate was 14 percent which would put a negative impact on about 80 percent industries related to textile sector.
Tariq Sayeed, former FPCCI president dubbed the budget as 'people friendly', saying that government under the leadership of President General Pervez Musharraf had presented historic budget. He said that he was not in a position to express views at this movement without going through budget document.
He criticised that current GDP growth stood at 7 percent that should have been at 9 to 10 percent. "In the current situation government would fail to achieve export targets," he added.
He pointed out that State Bank of Pakistan needed reform policies because the bank had failed to curtail rising interest rates, which could be disastrous for industries.