The Pakistan Industrial and Traders Associations Front (PIAF) on Friday criticised the State Bank of Pakistan's decision to impose a 100 percent cash margin on import of several consumer items. In a meeting with a delegation of Importers Association, PIAF Chairman Irfan Iqbal Sheikh said the industry was hoping for growth after a phase of stagnation but this decision would hit the industry hard as duty has been doubled on several raw material items of the industry.
The meeting was also addressed by Senior Vice Chairman Tanveer Sufi and Vice Chairman Shahzeb Akram. Irfan Iqbal said that this illogical move, which was aimed at reducing import bill, would actually promote smuggling and increase prices of many items and intensify problems for both trade and industry. PIAF chief said that the government idea is good to discourage the imports but the solution would have major impact on traders, dealers and general public, as the cost of these household products would be high. There are other options to tackle this issue instead of exploiting traders who have invested billions on import of these items and contributing to national exchequer too.
He said that most of the items are used in almost every household across Pakistan therefore every Pakistani will suffer. Efforts must be made to increase the exports which are declining for last three years. Instead of taking steps to reduce the cost of doing business, the only way to enhance export, the government has penalised the importers, but this was not the solution and must be condemned. Actually the government has failed to improve the declining exports hence they have no option but to block the imports in order to deal with the widening trade deficit.
The PIAF chief said that the central bank had committed to bridge high trade deficit through this move, but the government should have focused on an effective strategy to deal with declining exports instead of taking such anti-business step. He said that the majority of the small importers whose businesses were operating purely on the basis of credit would be completely wiped out. He urged the authorities concerned to review the situation and immediately withdraw the decision.