PCCCC to help formulate better economic policy framework: minister

LAHORE: Provincial Minister for Industries, Commerce, Investment and Skill Development S M Tanveer has said that the Punjab Chambers of Commerce Coordination Committee (PCCCC) will help evolve a better economic policy framework.

He was speaking at the Lahore Chamber of Commerce and Industry. LCCI President Kashif Anwar presented the address of welcome while Provincial Minister for Local Government and Community Development Ibrahim Murad, LCCI Senior Vice President Zafar Mahmood Chaudhry, Chairman PBIT Jalal Hassan Khan also spoke on the occasion.

The minister said that apart from this, the summary of the Industrial Police Liaison Committee has been sent. It is hoped that it will be approved soon, which will make it possible to end the problems of theft and law and order in industrial estates.

He said that after the approval of IMF loan, payments will also be received from many friendly countries. He said that the industrial estates, in which the plots have been sold and the industry has not started, will also be worked on with the help of LCCI. One of the reasons for the lack of industrialisation is the increase in cost of doing business. He said that the issues of WASA charges, SME loans and other such issues will be taken up with the concerned authorities.

He said that a Desk of Industries department should be established at Lahore Chamber, whose TORs should be fixed as soon as possible so that the problems from Industries and related departments can be resolved through the LCCI. He said the LCCI should give training to all chambers.

Provincial Minister for Local Government and Community Development Ibrahim Murad said that the local government is the main functionary of the government. Local government looks after the matters like encroachment, building approval, commercialization, TMEs and parking. Whatever problems may arise in these departments, the local government offices will always be there to solve them.

He added that 130 markets for cattle purchase and sale have been outsourced by the local government across Punjab. These markets generate annual revenue of Rs 3.7 billion against the expenditures of Rs 500 million. It has investment potential. Anyone who is interested can benefit. Similarly, parking companies are also owned by local governments.

He said that development fund of the local government is Rs 40 billion. The local government uses its own funds to build a road up to five km. Apart from this, there is also an investment of one billion dollars for international projects. We wish to increase the economy of Lahore from 85 billion dollars to 400 billion dollars.

LCCI president Kashif Anwar said that the serious economic challenges that the country is going through at the moment are having a direct impact on the business activities and the business situation in the country has become very bad. In order to overcome these economic problems, we have to pay immediate attention to the promotion of Import Substitution and at the same time we have to take steps to increase the exports to the desired targets.

He said that the country is facing Foreign Exchange Crisis due to trade deficit, as a result of which banks are having problems opening LCs. More than 10,000 import containers are still stuck at the port, on which the business community is facing detention, demurrage and port storage charges with every passing day. He said that many of our industries have shutdown due to non-availability of imported goods or raw materials and the entire supply chain has been affected and the remaining industries are barely functioning.

The minister of Maritimes Affairs gave a statement that storage charges will be waived off but no notification has been issued in this regard yet.

The LCCI president said that our industries have to import a lot of raw materials, essential components and various machineries which are not available in the country, on which they have to pay 100% cash margin, regulatory duties, customs duties and additional customs duties, which need to be eliminated. Apart from this, the issues of pending refunds and multiple audits are pending along with reducing the rate of withholding tax for businesses.

He said that the policy rate for our industries which has reached 17%, inflation rate which has exceeded 27%, we are facing severe rupee devaluation and due to high energy cost including increasing tariff of electricity and gas, our input cost has increased due to which our export competitiveness has increased a lot.

He said that we appreciate the performance of Punjab Environment Protection department, but shutting down industries to control smog is not the solution to the problem. Other factors should also be controlled. Dumping sites in the city also create pollution. Before taking any action against the business community, prior notice must be sent and Chambers of Commerce must be kept in loop.

Kashif Anwar said that the problem of dirty water is increasing in the city of Lahore. The installation of water treatment plants should be restored.

“We are an import-based economy, our industry is highly dependent on raw material imports”, he said and added that cotton, which is an important raw material of our textile industry, produced 9.1 million bales of cotton in 2019-20 which has reduced to 8.3 million bales in 2021-22.

He said that LCCI has always insisted on increasing the tax base. We have suggested the government to immediately announce the Declaration Scheme so that Undeclared Foreign Reserves can become part of our economy.

He said that apart from this, there are some issues regarding taxation. Currently taxpayers have to undergo multiple audits of income tax and sales tax, we appeal that the number of these audits should be reduced. He said that there is an urgent need to simplify the tax system.

The LCCI president said that there is an urgent need for the establishment of Special Economic Zones and Export Processing Zones in Lahore for the promotion of import substitutions in Punjab, because the two major industrial estates of Lahore, Sunder Industrial Estate and Quaid-e-Azam Industrial Estate, have almost reached their full capacity.

He said that one of the major problems faced by the business community is that the cost of land in the existing industrial estates has reached a very high level. He said that there is a need for a simple leasing policy through which land can be provided in existing/new industrial estates especially for SMEs on long term lease and at reasonable rates. We would like you to play your part in this regard.

He said that SMEs get only less than 6% of private sector financing and about 65% of SMEs belong to Punjab. We also want special steps to be taken to facilitate access to loans at reasonable rates without collateral for SMEs. To improve access to technology for SMEs, government agencies under Industries department need to provide maximum support to engineering and food sectors.

The LCCI president said that water tariff for industrial and commercial use in Lahore by WASA is one lakh rupees per cusec, which is many times more than other cities of Punjab. A uniform tariff should be fixed for all cities. We want you to play a positive role in this regard.

He said that the implementation of this Punjab Infrastructure Development Cess at the rate of 0.9% on dry ports in Punjab has forced businesses in Lahore and other parts of Punjab to clear their consignments from Karachi, which has also shifted the tax revenue from Punjab to Karachi and dry in Punjab. The cess collection was just Rs 5 billion in 2021-22. The LCCI demands the removal of this cess.

He said that promotion of foreign investment as well as local investment is the most important need of the hour. According to the Economic Survey of Pakistan, the ratio of total investment in our country is only 15% of GDP, which is quite low. The share of private investment in this is only 10% of GDP, which has become inevitable to increase. This situation of investment in Pakistan should be improved.

He informed the ministers the LCCI has informed the leaders of almost all the major political parties of Pakistan through letters that we have taken some measures to fix the current economic conditions of the country. We have compiled important proposals and requested them to share their economic manifesto with us to help create a Charter of Economy that represents the position of all political parties.

Copyright Business Recorder, 2023