The sales of locally manufactured tractors have picked up by 50 percent in the month of October as months of October and November are the peak season for tractor sales. Farmers purchase new tractors after harvesting the Kharif crops, rice, cotton and sugar cane for preparing fields for sowing the Rabi crops wheat, grams, oil seeds, sunflower, vegetables, maize and fodder.
A senior executive of Millat Tractors Ltd told Business Recorder here on Friday that following the imposition of 16 percent GST in March 2011, tractors sales had gone down to such an extent that two leading tractor manufacturers, M/s Millat Tractors Limited and M/s Al-Ghazi Tractors Limited had to close down their plants and lay off their skilled workers.
He said that months of October and November are the peak season for the sales of tractors as the farmers have ready cash to buy essential agriculture implements from the shelf and make long-term investments in their business. However, he said that the present quantum and pace of sales is only 50 percent as compared to past years which is not sufficient to support the vibrant and flourishing domestic tractor industry.
He said the tractor industry had contributed significantly in the farm mechanisation and agricultural growth of the country by supplying 75,000 tractors every year with a turn over of Rs 45 billion on account of supportive policies of the government towards agricultural growth in the past.
However, figures released by Pakistan Automotive Manufacturers Association (Pama) revealed that tractor sales plunged by 81 percent in the month of July 2011 as tractor production dropped to only 1,732 units from 5,468 units in July 2010. Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) sources told this scribe that the government has not taken corrective measures to revive the tractor industry aided by 300 vending units, specialist of automotive parts and accessories, with an employment of 100,000 workers who are at the verge of loosing their livelihood.
"Their representatives have had several meetings with the senior officials of the Ministry of Industry for the withdrawal of 16 percent tax on the tractors but failed to achieve results," they added. They said, in fact, 90 percent of automotive parts industry constitutes Small and Medium size Enterprises (SMEs), out of which about 95 percent are self-financed generating employment for about 500,000 skilled labour force.
A former PAAPAM President M. Aslam Malik said that the price of the Pakistan-made tractor was the lowest in the region and the vending industry was saving millions of dollars in the foreign exchange by providing highest quality auto parts to 0.5 million cars, trucks, tractors, etc, per annum. Malik said industrialists had invested billions of rupees in over 800 vending units to make Pakistan self-sufficient and exporter of tractors, cars and trucks, but the 16 percent GST on zero-rated tractor industry has plunged the manufacturers and their vendors in turmoil and financial crunch.