Karachi (PR): Mr. Irfan Iqbal Sheikh, President FPCCI, has led a high-profile delegation of FPCCI to meet Mr. Ishaq Dar, federal minister for finance & revenue, to present FPCCI’s budget proposals. The delegation also comprised of Mr. Suleman Chawla, SVP FPCCI; Mian Anjum Nisar, former President FPCCI; Mr. Zakaria Usman, Convener of FPCCI’s Budget Advisory Council; Mr. Younus Dagha, Chairman of FPCCI’s Policy Advisory Board, among other office bearers & officials of the apex body.
Mr. Irfan Iqbal Sheikh has emphasized that the upcoming federal budget 2023 – 24 provides golden opportunity to the government & the business community alike to agree upon and introduce budgetary measures and policies to enable industrial growth in Pakistan; explore avenues for import substitution and revive sick units through targeted, phased and result-oriented fiscal measures.
Mr. Irfan Iqbal Sheikh explained that industrialization is the key to wealth creation and reversing the trend of dwindling per capita income in the country; bridge trade deficit and create employment in these difficult times. Additionally, we can only have healthy foreign exchange reserves (FER) on a sustainable basis if our industry earns substantive sums in a number of industrial sectors – like many of our regional & sub-regional countries, he added.
FPCCI chief stressed that this is particularly important at a time when the large-scale manufacturing has registered a massive decline as LSM Index for March 2023 went down by 25 percent YoY. Furthermore, LSM Index is down by 8.1 percent for the first 9 months of FY23 cumulatively – i.e. persistent negative growth for the past 3 quarters in a row.
Mr. Irfan Iqbal Sheikh also highlighted the grinding reality that LSM is at its lowest for the past 3 years and it is no less than an industrial emergency. However, there are many policy tools and fiscal measures at government’s disposal to help the business community revive the industrial production in the country: (i) subsidized electricity & gas tariffs for the industry under regionally competitive energy tariff (RCET) mechanism to bring Pakistani industry & their exports at par with at least the regional competitors;(ii) textiles being the mainstay of Pakistan’s exports; accounting for almost two-third of country’s exports and $19.3 billion in FY22; should be facilitated through ensuring steady supply of their principle raw material, i.e. cotton. We need to address the ever-decreasing domestic cotton output through incentivizing cotton cultivation. It is pertinent to note that cotton accounts for 60 percent of the production cost of textiles; (iii) access to finance should be ensured to the industry at all costs as capital is like blood for the smooth operations & expansion of the industry. Pakistan needs export finance at a discounted & affordable rate – coupled with subsidized finance for plants & machinery; (iv) leather, surgical equipment, sports goods, pharmaceuticals and industrial units in SMEs should be given priority for their ability to scale-up in terms of enhancement of export volumes and being labor-intensive; (v) all export processing zones (EPZs); special economic zones (SEZs) and special technology zones (STZs) in the country should be fully operationalize with the help of friendly countries like China, South Korea, Malaysia, etc. and with the support of special funding programs from developmental financial institutions (DFIs) or international financial institutions (IFIs); (vi) FBR should be reformed to play facilitative role in industrialization through end to corruption, harassment, maladministration, red-tape and complete digitalization of their operations & procedures.