Hamid Sultan, Chairman, Sewing Machine Development Committee, Engineering Development Board (Ministry of Industries and Production) has expressed grave concern over the implementation of SRO-462, which is yielding negative impact over the small scale cottage industry of sewing machines in the country.
Talking to newsmen, he urged the government to impose sales tax and to enhance Customs Duty on the "Import of Domestic Sewing Machines" to protect local cottage industry. Implementation of SRO 462 caused havoc to the cottage industry of sewing machines in the country and it is at brink of disaster emphasising the infrastructure of this industry in Pakistan, he added.
Hamid Sultan mentioned that the Sewing Machine Industry can be categorised as family based/owned small sized production units with small amount of capital whose production process is based on imported raw material to say as, pig iron, coal, silicon, steel sheets, iron steel bar, paints, electroplating material, tools, jigs etc, and manufacturers are catering their requisites from open market and their purchased all material carry the payment of sales tax from 15-20 percent ratio. During past sixty years sewing machine industry remains as cottage industry as big units have not yet been established either by the private sector or public sector.
In Karachi, he said that there are two medium type units Salika Sewing Machine Company and Singer Sewing Machine Co, both units are assembling sewing machines in small quantity and their production factories are closed due to uncompetitiveness as China and India jeopardising our industries owing to high production cost and technical changes in production, shrinking of economic distance, new norms of industrial production. Instead of poor production base this industry meeting 95 demands of the country and its contribution to the exchequer and employment is stimulating our economy towards saving of our foreign exchange required for the import of machines.
As to the parts manufacturing process Hamid Sultan said that parts are made with zero technology involvement with inherited artistic skills and simple indigenous technology. The lack of modern technology do not have the capacity of mass production of sewing machines. As much as the assembling process of sewing machine assembling is concerned it is conventional proto type. In production line 50 years old Milling Machine, Lathe Machine, Facing Machine, Drilling Machine, Cutting Press is used.
Concerning the deployment of labour in this sector Hamid informed having its structure as family based small industry this sector is playing vital role in poverty alleviation by providing jobs to more then 100,000 people those are engaged in parts manufacturing and sewing machine assembly work.
Highlighting the impact of SRO-462 on this industry, he briefed that the zero rated sales tax free incentive provided in the SRO will badly hurt our existing production infra structure, because all the industry falls under micro (cottage industry category) those are purchasing all raw material with payment of 15-20 percent sales tax, but being categorised as micro units they are not capable for sales tax net which could provide them input out put facilities, when local small manufacturer will produce parts with imported raw material wherein sales tax will be paid how they can compete with zero rated sales tax imports. Low tariff incentive will cause closure of local industry in the era of global competitive threats, whereas import will increase giving burden to our exchequer.
For value addition of our garments industry it is imperative to protect local sewing machine industry so that development and progress in it can be evolved.