At least ten thousands cottage industries across the country have been completely shut down during one a half year in the wake of higher utilities' prices and imported Chinese goods, which has glutted the domestic market in the last five years, sources said.
The weaving sector of the cottage industry is major part, which has completely been routed out by high electricity, gas and petrol prices, while the continued electricity loadshedding has scaled down the level of production at large, they said.
Plastic molding and embroidery sectors have also badly suffered due to increasing cost of business, they added. "The two major industries are believed to be the economic barometers of any country- one is small and medium enterprises and the second is cottage industry. The growth of these two important sectors help flourish country's economy," they added.
Besides dumping of cheaper goods of China the cottage industrial units had begun toward closures, and more than 10,000 units have closed their operations because of increasing and unaffordable utility tariffs during the last 15 months, said President All Pakistan Organisation of Small Traders & Cottage Industry, Mehmood Hamid.
He said that according to government's survey, there were about 0.15 million cottage industries in the country, adding that such an industry could be set up at a cost of Rs 0.1 million to Rs 5 million. He said that cottage industrialists had demanded of the government to provide the industry with Rs 10 billion special package with a view to sustain the over loadshedding causing million of rupees losses to them.
"However, the government in the federal budget 2007-08 completely overlooked the problems of small and medium enterprises and cottage industries," he said.
The true colour of the budget could easily be reasoned out in the pre-budget perspective, when prices of major essential commodities were increased as a pre-planned and then their reversal was announced in the budget speech will render nothing significant for the public and the cottage industry.
He pointed out that the cottage industry was badly hit by the increasing prices of the electricity, gas and petrol, adding that electricity constant failure had almost brought the industrial productions to a standstill.
The economic policies of the World Bank (WB) and the International Monetary Fund (IMF) had never been adequate for the country and the government should introduce its own economic policy for the augmentation of small and cottage industries, he added.
Mehmood said that the government should scale down its non-development expenditure by 40 percent to avoid economic crisis like situation in the country, besides freezing the utility tariffs for one year at least.
Chairman Alliance of Market Associations Karachi Atiq Mir urged the government to underpin its local SMEs and cottage industries were on the verge of complete closure. He said that the government should support these industries to fight the regional players in the world market with healthy and standard productions.
The furniture, readymade garment, footwear and toy manufacturing industries were the major local industries had fallen flat to cheaper Chinese products in the country.
Atiq said if the government was willing to improve the export ratio, it should support the local industry through huge incentives, expressing fears the local industry could almost perish in the wake of continued imports and high cost of production.