As the budget approaches, Paapam has once again raised its concern over the decline of volumes of tractors for the last 5 years and urged the government to take appropriate measures to revive this strategic industry. "Volumes have come down from over 72 thousand tractors in 2010-11 to 45 thousand in 2014-15, and expected to close this financial year with below 30,000 units leading to closure of hundreds of SME units associated with the tractor industry, meaning loss of revenue and jobs," chairman Paapam Mumshad Ali told Business Recorder here on Monday.
Speaking about the dire state of this industry he said the federal ministries of finance, industries and food security, and provincial governments of Punjab and Sindh need to come on the same page for the growth of this vital industry. "Government policies are inconsistent and directionless, and the industry goes into a cycle of boom and bust due to this," he opined.
The FBR changed GST regime five times during the last five years, imposed RD of 30% on steel raw materials used by this industry, and ministry of food security wants to allow import of tractors at zero rated duty. Besides the provincial governments of Sindh launched tractor subsidy scheme announced in its finance bill only last month after a delay of 10 months, where as the Punjab government withdrew the Rs 5 billion subsidy for purchase of 10,000 tractor announced in its finance bill without any notification. All these incoherent directions of the government are to blame for the crisis this industry is in, explained the Paapam chairman.
Talking about the solution, Ali said that an interest free loan scheme that runs for five years, on the model of the Apna Rozgar scheme would be ideal solution for the revival of this industry. Commercial banks, ZTBL, BoP, and Sindh bank need to raise funds to inject into this market to make tractor purchase affordable for the hard pressed Pakistani farmer.