HYDERABAD: President Hyderabad Chamber of Commerce and Industry (HCCI) Adeel Siddiqui has expressed his surprise over State Bank of Pakistan’s decision not to review mark-up ratio in its monitoring policy and said that it looks that SBP was away from ground realities.
In a statement issued here Thursday, he blamed SBP for it unpopular decisions that leading economic cycle to destruction in the country. He said that in western World Bank credit goes mostly to private sector whereas in Pakistan the government was major borrower instead of private sector.
HCCI Chief said that this benefits the government and with this mark-up ratio trade activities in countries Pakistan could not afford its negative implications. For instance, he said, that if one percent cut is given effect in mark up ratio it could lead to benefit of Rs600bn for people and similarly one percent increase in mark up ratio harms government’s interests. He said for overcoming this deficit government opts for levying more taxes.
Adeel Siddiqui said that SBP had raised interest to 22pc when 38pc inflation was recorded last year. Now, he further said, when inflation is hovering 18pc to 20pc coupled and trade balance, foreign exchange reserves and local currency showing improving then what was preventing SBP from reducing mark-up ratio. He regretted that all economic indicators were positive now.
President HCCI said that SBP could benefit government by curtailing mark-up because present ratio was not leading to any positive results in taxes imposed by government as entire investment is utilised for payment of bank mark up. He said that for clearing this loan, getting new loans become inevitable.
Siddiqui believed that the only way to improve economic activities is to curtail mark-up ratio that could help SBP as well. He said why SBP was unable to curtail the mark up ratio and urged government to take solid measures. He informed that businessmen and traders always observe trade and industrial activity in neighbouring countries where single digit mark-up was leading to great economic activities.
HCCI Chief said that Pakistan’s business community was suffering from sense of self deprivation. He reiterated that only 1pc cut ratio means Rs600bn benefit for government and this saving could be utilized for growth which 0.7pc last year and that was highly insufficient for Pakistan. He said that trade and industrial activity should be increased to improve growth.
Copyright Business Recorder, 2024
Comments
Comments are closed for this article.