LAHORE: The Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) has welcomed the tractor schemes in the provincial budgets of Punjab and Sindh – the two provinces with the strongest agriculture base.
“The Punjab government has allocated Rs5 billion for the distribution of 25,000 tractors while the Sindh government has marked 29,089 tractors at a subsidy of Rs200,000 to Rs300,000 on each unit,” said Paapam Chairman Siddiq Misri, adding that a total of 54,089 tractors would be made available at subsidised rates.
“All tractors locally produced should be subsidised as a long term national policy,” Misri added.
Paapam Senior Vice Chairman Mumshad Ali lauded the launch of subsidy scheme but warned of the massive drop in orders before the launch of the scheme and after the end of it.
“Every industry requires a stable volume growth and the current schemes do not take this factor into account. If schemes are made on a long term, even at the cost of reducing subsidy amount, it will provide industry with stable demand and take the corruption element out of the system,” said Ali.
The Paapam chief further added that these tractor schemes will help sales and its impact will be felt in downstream industries as well as in the output of the agriculture sector.
Meanwhile, vice-chairman Iftikhar Ahmed argued that an increase in prices of tractors due to 17% sales tax in the last regime made it difficult for farmers to purchase new tractors especially in view of reduction in loans from ZTBL, resulting in low production levels of the tractor manufacturing.
“But the present government’s decision to reduce it from 17% to 10% will go a long way in boosting sales.”
Published in The Express Tribune, June 17th, 2015.
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