The government should take concrete measures to save the manufacturing sector which was neglected in Auto Policy 2016, said former President of Multan Chamber of Commerce and Industry (MCCI) Mian Iqbal Hassan. He has said the country's manufacturing sector is in serious problems because of none availability of energy and high input costs, besides extremism. Our neighbouring countries China and India are dumping their finished products in Pakistan.
Talking to media men here on Sunday he said that China and India have allowed huge amount of export subsidies on their finished goods and also imposed export duties on the export of raw materials. Our largest exporting textile sector is in serious problem and losing its exports. Our major imports are of high value addition and exports highly low value addition. Our all free trade agreements are in negative. The unemployment is tremendously increasing. The economic conditions are derailing. Our imports are increasing and exports shrinking from $24 billion to $20.4 billion, having alarming increase of trade deficit to $23 billion in current year as compared to $21.3 billion last year, in spite of the fact that oil prices reduced from $115 to $38 per barrel. It is to be noted that deficit in 2001 was $294 million. Pakistan is loser of free trade agreements (FTA) particularly with China, Malaysia and Indonesia at large scale. All these problems should be adjusted. All concessionary SROs for import of finished products should be abolished as promised by the finance minister in the coming budget.
It is alarming situation that last year overseas Pakistanis remittances were 18.4 billion dollars and were expected to be 20 billion dollars in the current year. The remittances are shrinking for the last two months because of decline in fuel oil prices and particularly Middle East countries have shut down their developing projects and have started to lay off their labour.
About 400 to 500 personnel are daily de-boarding from Dubai. All remittances are swallowed every year in debt servicing and deficit economy. It is submitted that these remittances should be utilised for construction of large size dams for storage of water and power generation instead of spending on trade deficit and debt servicing.
The government has passed on the circular debt for Rs 450 billion to the tax payers.
WAPDA has also demanded from NEPRA to increase the Hydel energy charges by 117 percent, ie from 1.74 rupees; to 3.78 rupees per unit in the financial year 2015-16. It is to be noted that The Wapda has also admitted this fact that on 27th of June 2015, they have generated 138 million units from Tarbela at a cost of 0.92 rupee per unit and storage of water having volume 9.015 million acre feet. According to the data presented to the National Assembly on March 14, 2016 about per unit generation cost of electricity produced from various sources, it is Rs 1.78 for Hydel in comparison to Rs 7.97 for gas/Rs 11.74 for residual furnace oil (RFO)/Rs 18.61 for high speed diesel oil (HSD)/Rs 9.06 from IPPs/Rs.12.06 for coal/ Rs.8.33 for nuclear/ Rs.14.31 for wind/ Rs11.78 for bio gases/Rs.22.81 for solar and Rs10.49 per unit for electricity imported from Iran. The Wapda has also demanded Rs.3.01 per unit on Hydel generation on 5th May 2016 to pay off 51.1 billion rupees to KPK. This increase will farther hamper the declining exports.
Moreover, the Wapda has been charging Hydel surcharge from 1977 and also Neelam-Jahlam Hydel surcharge from consumers which are only meant for construction of large size dams and production of electricity at cheap rates for consumers. We strongly demand an inquiry from WAPDA by an independent commission regarding amount of Hydel surcharges collected so far. It is to be noted that the energy suppliers ie Gas companies and WAPDA and its purchase and sale companies are Limited companies by charter not the government of Pakistan. How they can transfer their losses to consumers.
Criticising the Auto-Policy 2016-21,he said that it has been announced without any manufacturing targets and consultation from the vendors. The fair level playing fields has not been provided to the local auto vending industries. The old designed tractors without EURO-2 compliance engines are being imported and are against the policy of the government therefore it should be reviewed. The tax payer money in the form of subsidies to the farmers should only be restricted for purchase of locally manufactured tractors having minimum 70 percent local components to provide job opportunities for our labour. It will also boost the local industry and increase in the government revenue.
He was of the view that the world is in high recession and facing sales problems. Pakistan is facilitating imports by reducing import duties and removing all bottlenecks. The world players are imposing regulatory duties to facilitate their local manufacturers. Whereas, we are allowing free import at reduced or zero tariff of many products and losing hundred of billion rupees; revenue. Please look in to it seriously and adjust in the budget policy accordingly.