BUDGET 2006-07 SOUNDS MORE FOR TRADE RATHER THAN INDUSTRY
Businessmen, traders and industrialists have shown mixed reaction on the Federal Budget 2006-07 as there are many things yet to be sorted out.
Perhaps hurry made many aspects related to industry, import and exports slipped out from the budget exercise.
By MONEM FAROOQI
June 12 - 18, 2006
The LCCI had made ample arrangements for listening to the budget speech, a larger number business assembled in the afternoon. The budget is not as industry oriented as it should have been, was the first reaction soon after the speech, "It would benefit the traders and we shall depend more on imports for many goods.
The LCCI president, Mian Shafqat, however lauded the decision taken by the government in the context of social relief for the industrial employees. He also expressed industry support for the subsidy on pulses and also Zero-rated duty on tractors, though me argued that would have a minimal impact on the local tractor sector. He also supported the relief package announced by the government for the poultry sector.
Among others who expressed their views about the budget included the Chairman of Punjab Economic Forum Mian Anjum Nisar, who said that the business community concern has been over the cost of doing business in the economy and towards that effect no details have been shared in the budget speech. He said that the business community was bothered about international competition as the steps taken in the budget gives a strong inkling that mark up rates would increase in the coming months.
The Budget has made a shift as it is first time that emphasis has been laid on development of social sectors. The widely criticized aspects of poverty, unemployment and price hike and other issues have been addressed. It is not a traditional budget", said Mian Anjum Nisar.
He said that for the first time livestock and diary sector have been given due importance. Now these sectors would become formal after establishment of Livestock Board and Diary Development Board.
President Pervez Musharraf had already said that there was great potential in diary and livestock products, Beg was of the view that next year the agriculture sector would grow more than 8 percent if all required measures are taken.
However, he expressed his reservations on the increase in the salary of workers by Rs 1,000 per month. "I m sure that the salary package might benefit the workers to some extent but it would reduce value addition," he added.
The LCCI president said that it is quite astonishing that the Minister in his speech did not mention the incentives for textile sector as makes 70 percent of the exports saying that Industrial and textile growth was inter-related and interdependent.
Majyd however appreciated the measures taken for boosting agriculture.
"We have seen lot of drawbacks in the development of agriculture. I am sure that the incentives would surely benefit the agriculture sector. It could be better if the corporate farming was given a due place instead of giving subsidies, You know the subsidies never produce the desired results.
May be the incentives for textiles might be announced later", he hoped.
"We had given proper presentation to Prime Minister in this respect. No clear cut mention is made about export incentives", he added.
Anjum Nisar said that he watched the speech of the honorable minister but could not find any reference to important issues. "Perhaps I missed the incentive package for textile," he added.
He said that it was really good that real estates business has come into documentation net. The tax on estates would also bring a great relief.
Moreover, it would minimize speculation in real estate prices, he said.
Former President LCCI and convenor LCCI standing committee on Finance & Taxation however opposed the raise in the sales tax on retail from 0.75 per cent to 3 per cent and said that the business community should protest over the same. PIAF leader Mohammed Ali Mian who called supported him that step contrary to the continuity of policy.
Senior Vice President LCCI Abdul Basit took exception to what he called an unsatisfactory relief package for the poultry industry. He called the Rs one billion package as joke with the sector. He said that if concrete measures were not taken; an inflationary spiral couldn't be avoided. He said that the sector asked for zero-rated loans for the small poultry farmers as well as tax holiday a both the steps have not been announced, he noted.
Sohail Lashari, CEO of renowned entertainment chain said that the budget made no mention of how tom minimize the cost of doing business and was more or rhetoric than any policy strategy. He said that major issues have been avoided. He said that if there are so much funds, nothing tangible is on the ground. About education, he said that what was important was quality education.
Majid Abdullah, one of the office bearers of Pakistan Flour Mills Association supported the steps taken in the context of agri sector growth. He made special mention of livestock sector growth.
Khalid Rafique, Director of renowned Construction Company argued that the tax on real estate would have no impact what so ever on the construction industry as much of the construction was not taking place in the Housing. He also called for better cost of doing activity environment for the Agriculture sector.
Sheikh Mohammed Arshad, former Vice President of LCCI said that there was no relief package for the major industries like textile and leather? He said that the subsidies have not been managed and only the pulses issue has been taken care off. He said that steps should have been taken in the context of controlling major fuel prices, he noted.
An investor from Lahore Stock Exchange said that tax on equities would hamper the share market growth. "We were already afraid as stock market had witnessed great up and down. We never anticipated that tax on equities would be levied," he lamented.
President Citizens Rights Association, Ch. Nasir Ahmed said that certain elements of the society were active in sabotaging the government's initiative of providing cheap sugar to public through utility stores.
He said that a survey conducted by the Citizens Rights Association shows that majority of the daily wage workers were occupying queues outside Utility stores to purchase subsidized pulses and sugar and resale it in the open market on higher markets prices.
He said the government's decision of providing pulses and sugar at subsidized rates to public was highly commendable but the way it is being misused is highly deplorable. He said that was major reason behind the high prices of essential commodities that prices were not going down, as the deserving ones were being deprived of purchases from the utility stores outlets.
Nasir apprehended that the exercise could again prove futile at the Tehsil and Union Council level, as the daily wages labor class could again jump into such business at these levels. He said even the daily wage labourers were bringing their family members along with them to occupy long queues and majority of them were purchasing especially cheap sugar for more than one time simply to make money out of it by selling cheap sugar to market on high rates.
He urged that the government for taking notice of the situation and ensure the arrangements necessary for availability of all food items including pulses and sugar subsidized by the Government to the deserving people of the society.
He said that the government, which was spending billions of rupees on subsidy of food items, should discourage those who were purchasing essential items repeatedly in a day. He said that every one should be scrutinized before letting the individual purchase subsidized sugar, pulses and other items, who are creating hurdles for common citizens to get in the queues.