ISLAMABAD: Flaying the government over increase in power and gas tariff, the business community said the decisions will have drastic impacts on the doing business environment.
They said Pakistan's annual exports of around $24 billion dollars is nothing and increase power and gas tariff will further increase the cost of production as a result the local exporters of various goods will lose markets.
According to traders, decline in exports and reduction in local sales finally hit government's revenue collection targets, urging the government to fix long-term power gas tariff for the industrial as well as commercial sectors.
Yasir Ilyas Khan of the Islamabad Chamber of Commerce and Industry (ICCI) said the German ambassador in a meeting with the ICCI representative on Friday also pointed out inconsistent policy of the government.
He said under such circumstance Pakistan's export will never increase but decrease. He said that Pakistan was a huge country as compared with Turkey, Germany or Bangladesh but due to inconsistent policies of the state, no segment of economy has grown as per potential strength.
Markazi Tanzeem Tajiran, Pakistan president Mohammad Kashif Chaudhary while expressing anger over the government decisions to increase tariffs, said under such conditions neither business nor trade would flourish.
He asked the government for reducing prices of electricity and ensuring a smooth supply of gas to industries and business centers to help boost economic activities.
If the present trend continued cost of doing business would go up leading to cancellation of global exports orders.
Kashif said increase in power and gas tariff have multiple impacts on any business as a shopkeeper, hotel owner and other entrepreneur shifts these costs on clients as a result consumers will have to pay more, consequently consumers will either stop using services or reduce their purchases, finally an entrepreneur will face financial losses owing to reduced sales.
He added that under such a situation the business operate will lay some of the staff to cut the losses, so it will add to unemployment.
Talking to Business Recorder, Ashfaq Yousaf Tola said that increase in power tariff was due and it will definitely increase inflation.
He said according to economists 10 percent increase in power tariff is resulting in taking the rate of inflation by 1.5 to two percent.
He added that other than Rs1.95 increase in power tariff was fuel adjustment and previous charges.
Rawalpindi Chamber of Commerce Industry (RCCI) president Mohammad Nasir Mirza commenting on the topic said that the government apparently is trying to shut down all the businesses in the country.
He urged the government to provide construction industry like package to all the industries, adding that within the past one year, the business community has faced serious challenges owing to the coronavirus lockdown and successive increase in power and gas tariff will further deteriorate the business activities.
Mirza said the business community was appreciative of some policies such as to discourage imports which helped reviving industrial sector activities, but this is not going to work anymore as increase in input costs will throw Pakistan made products out of the market.
He said recent exports data shows little bit growth, however, the increase in the electricity tariff will increase the cost of doing business and Pakistan may lose the competitive edge.
Copyright Business Recorder, 2021