KARACHI: Industrialists and exporters have rejected the hike in power tariff by the federal government and said that this decision would cause irreparable damage to the country's economy, which already posted negative growth during the last fiscal year.
The Economic Coordination Committee (ECC) of the Cabinet allowed on Friday an immediate increase of Rs2.39 per unit in electricity tariff for K-Electric customers.
Exporters said that the country's economy was already facing a number of issues, and in the current situation some supportive measures were needed to bring the economy back on the right track.
Rafiq Suleman, former chairman of the Rice Exporters Association of Pakistan, expressing his concerns over the rise in power tariff, said that the decision would lead to a huge increase in the cost of production for all industries, particularly the export sector.
The share of electricity in the expenditure of industries was very high, and in a situation when industrial production had already slowed down due to the lockdown, this increase would directly hit industrial activities.
Suleman said that due to internal and external problems, the country's exports were already declining. In this situation, steps needed to be taken to support the industry to increase exports, but the government was taking measures that were likely to further affect the export sector, he added.
"If we talk about rice, it is one of the top exported commodities, but, unfortunately, government has still not declared it an industry," he said.
He said that at present Pakistani rice was facing stiff competition from Indian rice in the international market. However, despite all the difficulties and challenges, the rice exporters had achieved export target of two billion dollars.
Good quality seeds, cheap electricity and aggressive marketing were required to compete with Indian rice in the international market.
He said that though improvement in the exchange rate had supported exports, yet some positive and supportive measures were required from the government to achieve healthy export growth during this fiscal year.
Suleman said that exporters and industrialists had been demanding of the government for a long time to freeze all utility tariffs for the export-oriented industries for five years so that the exporters could finalize their export deals with foreign buyers without any risk or fear.
Copyright Business Recorder, 2020
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