KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President, Irfan Iqbal Sheikh has urged the State Bank of Pakistan (SBP) to take urgent steps to decrease the reflection period in eCIB of SBP in the present given economic situation of the country, which requires increasing the level of ease of doing business in the present circumstances.
In a letter to Governor SBP, Jameel Ahmed, the President FPCCI said that the sustainability of business is contingent upon sustainability of fiscal and monetary policy. “In our country not only we witness the changes in the budget on frequent basis but also on consultation-less basis which adversely impacts the designed feasibility with some predictable values of the future from the time the business is initiated. Apart from this mini budgets have become no surprise or shocking for us,” he added.
In his letter he told the Governor SBP that the mini budget and changes in the fiscal policies, through ECC and Cabinet, are at large are being debated amongst the private sector stakeholder in terms of its any fairness to serve the economy of Pakistan, “which presently we would rate it to be in worst shape of assessment for stakeholders engaged in economy since at least few decades of working in our beloved country under the policies.”
Irfan Iqbal Sheikh said that the cost of doing business, in specific for raw materials, intermediary goods and those goods which are not locally manufactured, is very frequently affected by imposition of para tariffs, non-tariffs such as regulatory duties, additional custom duties etc. “In addition to that we are also confronting non-tariff measures in manufacturing industry, which are also hurting our economy at large.”
President FPCCI said that most of the businesses, in specific industrial products and reducing of locally manufactured goods against imports are responsible to the changing economic environment, in which SBP has also to consider to play role at least at this stage by reducing the eCIB not only for revamping but as well as by immediately reducing the reflection period to 3 years.
President FPCCI said that presently the production units which have been adversely affected due to policies causing distress sales to new entrepreneurs also is arrested by the continued time reflection period in eCIB inherited from seller to new buyer. For other products, it would be also prudent to proportionately reduce the reflection period atleast to 1/3rd of the present periods as specified for different situations.
President FPCCI said in his letter to Governor SBP that the eCIB period in case of industry may please be immediately reduced to 3 years in order to give breathing space to absorb some of the difficult working parameters in the present unpredictable situation wherein the fiscal policy remains not only unsustainable but it is causing dents in the prerequisite of predictability as the fundamental to conducting business, in specific the manufacturing economy.
He also asked Governor SBP to note that because of wrong policies manufacturing in 2007 to 2021 has already shrunk from 18 percent of GDP to hardly 14 percent of GDP, this decline must be arrested by SBP measures including the instant request for reducing the eCIB reflection period to three years.
President FPCCI said that FPCCI hopes that Governor SBP on the basis of including aforementioned few submissions including but not limited will issue directions on immediate basis for reducing the eCIB reflection period to 3 years from its reporting in order to provide breathing space for the affectees in specific in manufacturing.
President FPCCI also said that the policy of the government to affect import substitutions is also possible through one of the fundamental requirements for reducing the eCIB period to 3 years so that the banking facilities and considerations for the parties become normal against the securities, for which we are not seeking any concession, though or otherwise it also merits to be reviewed.
President FPCCI requested Governor SBP to take action and measures to reduce the eCIB reflection period to 3 years on immediate basis along-with revamping for proportionate reduction in reflection periods for minor overdue situations.
Copyright Business Recorder, 2022