ISLAMABAD: Federal Secretary Ministry of Industries and Production (MOI&P) Kamran Afzal has said that the government will reduce some protections provided to the local automobile industry in the forthcoming auto policy.
While briefing the Senate Standing Committee on Industries and Production, here on Monday, Kamran Afzal said that the government was striving to facilitate the consumers, as well as, the manufacturers.
The agenda entailed detailed comparison of car prices and specifications in the region, and briefing on impact of government incentive on the automobile industry and on the end users and functions.
The Committee was also briefed on the functions, projects and future schemes of Small and Medium Enterprises Development Authority (SMEDA).
The panel meeting was held under the chairmanship of Senator Faisal Subzwari, which was informed by the officials that the rates of locally-produced cars have gone down due to the revision in taxes.
Kamran Afzal said that the government will ensure provision of global standard in the new auto policy, adding that the government has reduced regulatory duty and additional sales tax on the automobile-related raw materials.
Officials of the Engineering Development Board (EDB), briefing the meeting on the agenda item the difference between Pakistani and Indian cars’ prices, said that Pakistan has imposed 30 to 35 percent taxes on cars, while India charges 17 percent of tax as they drew attention to the fact that taxes play a major role in determining the prices of cars.
“New cars have airbags installed in them; we have told companies they have to [make cars] inline with the international agreements that Pakistan has signed,” the officials said.
The demand for cars has increased following a reduction in taxes, the officials added.
They further said that India was producing over one million cars of Marwati Suzuki brand, whereas, in Pakistan, annual production of Suzuki brand is just 100,000; therefore, car prices in India owing to the huge production was low.
They further said that raw material including iron ore is locally available in India, while Pakistan was importing the raw material used for making the spare parts. This is also a reason behind high car prices in Pakistan.
The secretary Ministry of Industries and Production, said India not only manufactured car parts but it also produced raw materials.
While discussing the pricing of cars in Pakistan, the Committee was informed that in the case of small cars higher level of localisation and volume are among major reasons for lower prices of cars in India.
On the other hand, cost of larger cars like Toyota is lower than regional prices.
It was asserted that the government incentives resulted in reduction of prices of cars in the local market in range of Rs50,000 to Rs400,000 and has been beneficial to the end consumers, as well as, the industry.
It is expected that lowering car prices will increase demand thereby, creating opportunity for the automobile industry to increase capacity utilisation and opportunities for localisation of auto parts.
Chairman Committee Senator Syed Faisal Subzwari recommended that members of the Committee must visit production units.
Questions were raised about standardisation of safety protocols in newly-manufactured vehicles.
Being briefed on the functions, projects and future schemes of SMEDA, the committee was informed that there are 33 projects in the current PSDP. Various measures are being taken to promote the growth of SMEs in the country. The Committee was also informed that the National SME policy Action Plan 2020 has already been developed.
The Prime Minister’s Office constituted the National Coordination Committee (NCC) on SMEs development in August 2020. Accordingly, regular review meetings of the NCC were held under the chairmanship of the prime minister.
The National SME Policy Action Plan 2020 was approved by the prime minister in the NCC’s meeting held on 8th October, 2020.
Priority areas included regulatory simplification of the SMEs; simplified taxation regime, and easy access to finance.
While enquiring about projects in erstwhile Fata, the Committee was informed that the Economic Revitalization Program in collaboration with the World Bank was specifically designed for the region.
The committee members recommended that special attention must be paid on the development of the marble and gems and jewellery enterprises in Pakistan. A special briefing on the subject will be given to the Committee in the next meeting.
The meeting was attended by Senators Falak Naz, Fida Muhammad, Muhammad Abdul Qadir, Saifullah Sarwar Khan Niazi, Hidayatullah, and Attaur Rehman, besides senior officers from the Ministry of Industries and Production, the SMEDA, and other related departments.
Copyright Business Recorder, 2021