Moving wheels of economy: proposed measures in budget appreciated

Siraj Kassim Teli, leader of Businessmen Group (BMG) and a former president of Karachi Chamber of Commerce and Industry (KCCI), has said that impact of the budgetary measures adopted to move the wheel of economy will mitigate if government did not fail to streamline monetary policy, reduced mark-up rates, inflation to remain in double digit or increasing, and power crisis remains persistent.
Appreciating budgetary measures adopted to boost trade and industrial activities in the country, he said it is an appreciable budget in the present very crucial time when country is facing many challenges on economic, social and political fronts.
Addressing a joint press conference at KCCI on Monday, he said that abolition of regulatory duty on 342 items, removal of special excise duty of 2.5 percent, removal of federal excise duty from 15 items and complete removal within next two years, reduction of general sales tax from 17 percent to 16 percent, reduction of duty for pharmaceutical raw materials to 5 percent, increase in basic tax exemption limit from Rs 300,000 to Rs 350,000, increase in wealth statement limit from Rs 500,000 to Rs 1000,000 and reduction in tax rates on cash withdrawal are some of appreciable measures adopted to boost industrial and trade activities which would also help reduce prices of goods locally.
He said that the government has to minimise borrowing from State Bank of Pakistan, and reduce interest rates. If the government continues to borrow from SBP, inflation will not be contained and it will move up. All over the world, interest rates are prevailing at one percent to 6 percent, excluding a few countries where interest rates are higher. He claimed that around 35 percent industrial production capacity is lying idle in the country due to energy crisis. In the next 15 days the government has to streamline monetary policy and to overcome energy crisis.
President of KCCI Saeed Shafiq pointed to figures of dry ports and said that dry ports are becoming cause of national security problem and smuggling through which various illegal items are being smuggled, including arms. He quoted from a report which indicated that imported containers, meant for dry ports, are sometimes opened en route to the dry ports, and expressed fear that they may contain arms and ammunition, meant for terrorists.
He demanded that all imported consignments must be examined at Karachi port to block the way of smuggling. He noted that the government has reduced Karachi Electric Supply Company (KESC) subsidy from Rs 47.31 billion to Rs 24.88 billion, which may result in tariff increase from Rs 8 to Rs 14 which will hurt commercial, industrial and general consumers adversely.
Advisor to Chief Minister Sindh on Investment, Zubair Motiwala criticised changes made in blacklisting rules and said that under new rules refund will not be made to any company which made transaction with other company even if before its blacklisting. He said under previous rules refunds were made if due on a company before it's blacklisting and demanded withdrawal of the amendment in the rules.
He criticised reduction of allocation for education and health in the budget. Another former president of KCCI, Anjum Nisar, said that the government has once again ignored imposing tax on agriculture income. He said it is true that agriculture sector is a provincial subject but income tax is a federal subject and it should be imposed on all incomes exceeding exemption limits.
Vice President of KCCI, Junaid Esmail Makda pointed out that taxes increases are effective and implemented from June 3 whereas benefits were given is subject to be implanted from July 1, 2011. He demanded that incentives, concession and tax enhances should all be enforced from one and the same date. Another former president of KCCI, Majid Aziz, said that no efforts were made to boost small and medium sectors.