‘Hopes of economic revival in limbo’

Hyderabad industrialists, farmers skeptical about government support

HYDERABAD:

The federal and provincial budgets for fiscal 2023-24 have arguably kept the hopes of traders, industrialists, builders and farmers about economic revival and the sector specific government support in limbo.

However, the trade, industry and agriculture sectors find some modicum of support for their ailing economies in the budgets.

"In view of prevailing economic circumstances at least an attempt has been made to give some direction to the agriculture sector," said Sindh Abadgar Board Vice President Mehmood Nawaz Shah while talking to The Express Tribune about the federal budget.

He looked positively at the waiver of import duties on agricultural machinery and seeds. "This is a realisation of the fact that the growers regularly face shortage of quality seeds."

Shah found federal allocations for the agriculture sector to be low. Yet, he saw as promising steps the decision to provide interest free loans in the flood hit areas and to fund the horticulture sector subject to implementation. But he said more responsibility to undertake initiatives for the sector's development lies with the provincial government after the devolution.

He contended that the Sindh budget has fallen way short of their expectations even though Rs11.9 billion development expenditures have been proposed for the upcoming fiscal.

According to him, they had heard from some officials concerned about the budgetary support for oilseed growers in the province but nothing has surfaced in the budget.

"This is a vital sector which can help stop oilseed imports and can also become a foreign exchange earner." The country spent over $3.5 billion to import palm and soybean oilseed this year. The board's vice president recalled that after 2010 and 2011 floods in Sindh, sunflower was sown on up to 250,000 hectares. But some issues like lower yields and rates for the crops kept discouraging the farmers over the years after which the crop is currently being cultivated on less than 60,000 hectares.

SAB vice president said besides the financial support to the oilseed farmers, the government ought to introduce a regulatory regime to discourage imports and promote the local produce and to provide quality oilseeds. Shah referred to a project of Pakistan Oilseed Development Board in Thatta district and emphasized that the same project should be initiated on a larger scale.

He lamented that no measures are being taken to address the issue of shortage of seeds and demanded research and development on the local level.

HCCI

The Hyderabad Chamber of Commerce and Industry (HCCI) President Adeel Siddiqui praised the concessions and exemptions offered in the budget for the industry, exports, imports, agriculture, information technology, small and medium enterprises, construction and solar energy sectors.

However, he feared that a whopping budget deficit and an ambitious tax collection target may adversely affect the economy.

"The government would have to face problems in the days to come," he predicted and warned that if the Federal Board of Revenue is given arbitrary powers to ensure the tax recovery, the industrial and trade activities will suffer.

He called for taking back 0.6% withholding tax on cash withdrawals, arguing that the tax did not work in the past. Siddiqui opposed the salary increment for the government servants, saying the allocation for the pay rise should rather be spent on the development sector concerning trade and industry.

The HCCI's president said the government has tried to appease the International Monetary Fund through tough fiscal measures, requesting the international lender to help Pakistan revive and stabilize the economy.

ABAD

The federal budget has proposed a 10% or Rs5 million concession for the construction sector which consists of some 40 industries. The individuals constructing their own buildings will also be provided 10% or up to Rs1 million tax credit. The proposal, if approved, will come into effect for the projects starting from July 1, 2023.

However, the Association of Builders and Developers (ABAD) views this support as 'nominal' given the prevailing inflation which has hit their industry. "No relief has been provided on the purchase of construction materials which are imported or are produced locally," ABAD's Vice President for Hyderabad Region Engr Faraz Memon commented while talking to The Express Tribune.

He put the number of the allied industries at 72 against the government stated figure of 40 industries which will get up to Rs5 million concessions. A former office bearer of ABAD said the measures may offer some little help to the people constructing small units in the flood hit areas.

 

Published in The Express Tribune, June 12^th, 2023.