Pakistan Sugar Mills Association (PSMA) said on Monday that the government has ignored the needs of manufacturing sector in the budget and feared a loss of $3 to 4 billion in case sugar industry became sick.
Commenting on the federal budget 2007-08, PSMA spokesman said that with the announcement of availability of sugar at Rs 25 per kg at the Utility Stores, sugar industry has been exposed to heavy losses, particularly if beverage and sweet manufacturers kept on buying subsidised sugar in bulk from these stores.
The PSMA spokesman said the Federal Secretaries' Committee on Sugar had assured to maintain ex-mill sugar prices at Rs 31 per kilogram but the budget measures were in contradiction of their commitment.
Availability of unlimited sugar to such manufacturers using sugar as raw material from the Utility Stores would prove last straw on industry's back and soon the sugar mills would start defaulting, he feared.
The spokesman proposed that the government should ensure 1 kg to 5 kg quantity only of subsidised sugar available at the Utility Stores for the poor strata of society to avoid misuse of the subsidy on sugar by sweet, confectionery and beverage manufacturers besides other wholesale dealers.
Regarding increase in minimum wages for the unskilled labour, the PSMA spokesman apprehended that it would add further burden to the cost of doing business. According to him, increase in wages from Rs 3000 to Rs 4000 per month in budget 2006-07 and another increase in it to Rs 4600 in budget 2007-08 shows that government is not allowing local manufacturing sector to remain competitive in the world.
He said that the government should ensure subsidy to labourers in kitchen items instead of raising wages, which would have no big impact on the labourers' cost of living but instead jam the industrial wheel.
All the kitchen items, he added, including sugar should be exempted from Sales Tax, as a relief of Rs 3 to 4 per kilogram would be ensured immediately for the common man if the government exempts sugar from sales tax.