Secretary informs parliamentary panel: 'Samsung poised to enter local market; two firms short-listed'

ISLAMABAD: A parliamentary panel, Tuesday, was informed by the Secretary Ministry of Industries and Production that the top global cellular phone producer, Samsung, is poised to enter the local market and has short-listed two companies for local manufacturing after obtaining the authorisation certificate.

While briefing the Senate Standing Committee on Industries and Production, which held its meeting here under the chairmanship of Senator Syed Faisal Ali Subzwari, Kamran Ali Afzal, federal secretary Ministry of Industries and Production apprised the committee members that 85 percent of the total mobile phones in the country were imported every year.

The officials said that 21 new companies had been authorised to start local manufacturing/assembly (vivo, Airlink, Inovi, telecom, OPPO) boosting the local industry of the mobile handsets for domestic market and exports.

The members of the committee received a comprehensive briefing from the secretary, Ministry of Industries and Production on how the Industries and Production Division aims to facilitate industrial growth in the country.

The committee also discussed future plans and programmes of the ministry and its attached departments.

The secretary apprised the committee members that R&D allowance of three percent is given to local manufacturers as an incentive for encouraging exports of mobile phones.

Locally assembled/manufactured phones are also exempted from four percent withholding tax on domestic sales.

Senator Walid Iqbal termed this initiative a success story on the part of the Ministry of Industries and Production.

The committee's participants also discussed in detail the Electric Vehicle (EV) Policy.

Senator Faisal Saleem Rehman raised the question of energy consumption of electric vehicles.

The committee was informed that there is ample capacity in terms of energy.

The chairman committee sought a comprehensive report and a survey regarding the charging stations and energy consumption by the electric vehicles.

The chairman committee added that different divisions should work in collaboration and in a conducive environment for such developmental initiatives.

The committee was further informed that the EV policy approved by the cabinet is for four-wheelers, HCV's and 2 and 3 wheelers.

The officials said the government had approved nine models of 2 and 3 wheelers for manufacturing.

The committee was also briefed in detail on the auto development policy.

The committee was apprised that greenfield is being granted to 21 new investors with 10 percent, customs duty on non-localized parts and 25 percent, customs duty on localised parts for five years.

Expected investment under this policy was more than one billion dollars of which $504 million have already been invested.

Total capacity of the auto industry has been enhanced from 358,000 units in 2016 to 470,000 units in 2021.

The issue of "Own Money" exploitation in car sales was also raised by the attendees of the meeting.

The officials of the ministry debated that "Own Money" was primarily the issue of supply and demand benefiting the dealers only.

The ministry officials informed that basic reform had been introduced in booking and registration process of the car sales and additional withholding tax (WHT) of Rs50,000 on the engine capacity up to 1000cc, Rs100,000 on up to 2000cc and Rs200,000 on above 2000cc has been imposed.

This measure has been introduced as a deterrent to the practice of "Own Money".

Senator Fida Muhammad, while discussing the SME policy, raised the question of the role of the Ministry of Industries and Production in the field of agriculture.

"Pakistan is an agricultural economy and I don't see any development plan for the agriculture sector," he said.

Replying to the question of Senator Fida Muhammad, the officials of the ministry said that, agriculture was the domain of the Ministry of National Food Security and Research; however, the officials of the Ministry of Industries and Production informed that 90 percent tractor parts were being manufactured locally. "And the rate of duty is decreased by 20 percent for two years, if any industry introduces new model of tractors."

The committee was apprised that an amount of Rs60 billion had been granted over a period of three years for National Small and Medium Enterprises (SME) Action Plan.

Simplified taxation regime for the SMEs has also been announced.

They further said that 0.25 percent of gross turnover where annual business turnover did not exceed Rs100 million and 0.5 percent of gross turnover where annual business exceeded Rs100 million but did not exceed rupees 250 million.

A detailed discussion took place on the Utility Stores Corporation's Financial Performance.

The officials of the ministry apprised the committee that there were a total 4,000 utility stores in the country and 900 franchises.

The ministry informed that they were making efforts to double that figure by 9,000 through franchise system in the near future.

It was informed that there was a significant increase in the sale of USC from Rs10 billion in 2019 to Rs114 billion in 2021.

A committee was briefed in detail by Chief Executive Officer (CEO) of the Pakistan Industrial Development Corporation (PIDC).

The committee was informed that 35 percent of fruits were consumed by animals; therefore, a model project for Fruit Dehydration Unit (FDU) in Swat had been completed for utilisation of surplus fruit by the SMEDA.

The total cost of this project is Rs59.9 million.

The meeting was attended by Senators Walid Iqbal, Fida Muhammad, Faisal Saleem Rehman, Muhammad Abdul Qadir, Saifuallah Sarwar Khan Nyazee, Hidayat Ullah, and Imamuddin Shouqeen, as well as senior officials from the Ministry of Industries and Production and the attached departments.

Copyright Business Recorder, 2021