LCCI termed budget as balanced, incentive-oriented, people-friendly
By KHALID BUTT, Lahore
June 13 - 19, 2005
The Lahore Chamber of Commerce and Industry has termed the federal budget as balanced, incentive-oriented and people- friendly.
The LCCI President Mian Misbahur Rehman, Senior Vice President Sohail Lashari and Vice President Sheikh Mohammad Arshad, welcoming the long overdue relief given to the textile sector, called it a step in right direction.
Cut on duties such as on mobiles and marriage halls will definitely help uplifting living standards. Throwing light on the relief measures in the budget package, the LCCI leaders were of the view that the farmers would get a bigger benefit stemmed from duty reduction on tractors that has been reduced to 15 percent from previous 20 percent.
The construction industry would also get a boost as duty on earth-moving machinery has been eliminated. The promise in the budget to make amendments in DTRE would also help generate a lot of economic activity, the LCCI leaders remarked.
The government has, however, ignored a significant foreign exchange earning industrial sector i.e. the leather industry. The Finance Ministry will hopefully come up with some special package for leather industries.
While showing concern over duty on withdrawal of Rs25000 from banks, they expressed apprehension that the step might curtail deposits in banks, which may consequently affect the deposit base of the banking sector. They also pointed out that 15 percent tax on WLL is not a good step as it would hit a new industry hard.
Prominent personalities from different segments of the economy including Mian Shafqat, Aftab Vohra, Kashif Younas, Mubasher Sheikh, Noaman Kabeer, Majid Abdullah, Mian Anjum Nisar, Mohammad Ali Mian, Irfan Qaiser, Irfan Iqbal Sheikh, Faisal Iqbal Sheikh, Mohammad Yousaf Shah, Sheikh Mohammad Younas, Abdul Basit and Shahzad Ali Malik unanimously appreciated the economic managers of the country for their efforts in giving a good budget. The government has given special attention towards the agriculture sector with a focus to bring green revolution in the country.
Convenor of the LCCI Standing Committee on Cottage Industry, Ghulam Sarwar Malik called upon the government not to ignore cottage industry which he felt was really the backbone of the economy. Reacting unfavorably over imposition 0.1 percent of withholding tax on withdrawal of 25,000-rupees , the business community in Lahore feels that the government in a bid to broaden tax net has imposed this unfair levy which more often than note affect the middle income group. It could prove a futile exercise on the part of the government, as the people will have their own ways to counter to avoid or evade the levy. There are strong possibilities of increase in crime rate especially theft and robberies as what they described the levy as a childish step may force majority of the middle class to keep their savings at home. Raising an accusing finger, people in general were of the view that the levy on withdrawals must be the brainchild of the bureaucracy for misguiding the government.
Sohail Lashari, Senior Vice President of Lahore Chamber of Commerce and Industry (LCCI) said though the economy has started moving on the fast track as compared to stagnant growth in the past, yet the sustainable growth rate is necessary for long-term growth. Inflation was also increasing simultaneously which calls for immediate corrective measures for controlling the formidable price hike.
While praising the move relating to allocation of 5-8 percent development fund for social sector, he suggested that a major portion of that fund should be used for human resource development in view of growing need for high tech workers. The government should take steps to cater to this demand for a genuine and knowledge based economic growth in Pakistan.
The LCCI Vice President, Sheikh Muhammad Arshad, pointing out the reduction in customs duty on soap and detergents and industrial raw material, 20 percent decrease in duty on import of tractors as appreciable steps, he suggested that import of urea should also be zero rated to give a kick off start of agri-sector.
Executive Committee member of the LCCI, Irfan Qaiser, dubbed the budget for 2005-06 as people-friendly especially when it takes care of the salaried class, hard hit segment of the society by increasing reasonably in pays and pensions, minimum wages and pension under old age benefit scheme.
Irfan Qaiser said bringing down sales tax to zero percent on import of raw materials used in textile sector was a major step. Under this head, the government was collecting Rs22 billion while it was paying refunds to the tune of Rs33 billion to textile industry which would certainly result in net saving of over Rs11 billion per annum to the exchequer.
He, however, strongly criticized the policy of increasing turnover tax rate from 0.75 percent to 3 percent on an income of Rs5 million, which might cause panic among the people.
All Pakistan Cottage Industry and Small Traders Association Chairman, Ghulam Sarwar Malik, regretted over what he called the government has totally ignored the cottage industry in the budget. This segment constitutes 85 percent of the total business and provides jobs to the skilled and the unskilled labor force at a massive scale.
Pakistan Industrial and Traders Association Front (PIAF) Acting Chairman, Mubashar Sheikh, in his initial remarks observed that apparently the budget proposals look good yet they will produce the desired results only if an effective follow up for their implementation in letter and spirit was ensured by those responsible to take care of economic growth of the country.