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Business Recorder
21-05-2025
- Business
- Business Recorder
FBATI lauds govt's decision to give power relief for industries
KARACHI: Industrialists in Karachi termed the government's decision to fix the electricity tariff at Rs 38 per unit as a business-friendly step for industries of different sizes and sectors in the commercial capital of the country. President Federal B Area Association of Trade and Industries (FBATI) Sheikh Muhammad Tehseen lauded the government's decision to give relief to industries, urging the government to continue its efforts to reduce the cost of production in a phased manner to make exports of different products competitive in the global markets. Industries urged the government to contain the electricity tariff through its policy measures by 8 cents mainly for the export-oriented sectors to enhance the likelihood of earning increasing foreign exchange for the country, he added. He said the government should continue to negotiate with IPPs to reduce the cost of electricity to industries and residential consumers while encouraging them to produce low-cost green energy through solar power plants on a long-term basis. Also, the government should pass on the benefits of lowering petroleum product prices to industries and masses to control inflation and cost of production in the country, he further said. It is pertinent to mention here that the government reduced the electricity unit prices for April by Rs 7 per unit after bringing in reforms in the power sector. Chairman Sub-Committee on Power and Former President FBATI Syed Raza Hussain said the relief to industries of Karachi would translate into the growth in exports of various products and services, hence, the government should continue to support for large-scale to medium, and small industries with every positive step. He mentioned that industries of Karachi deserve equal albeit preferential treatment because of its contribution to export growth, however, the pledged subsidy on account of incremental benefit is yet to be paid by the government. He expressed his optimism that decreasing tariffs for electricity coupled with a single digit policy rate will not only attract foreign and local investment in industries but it will also encourage industries to consume enhanced electricity, ultimately, which will benefit to all stakeholders equally, including power- producing companies and the government as a win-win situation. Copyright Business Recorder, 2025
Express Tribune
25-02-2025
- Business
- Express Tribune
'Local schemes needed for SMEs'
Listen to article Business leaders said fostering Pakistan-based financing schemes can promote both small and medium-sized enterprises (SMEs) and local products, stressing that the government should provide loans for infrastructure and raw materials of economic establishments rather than wasting time and funds on training and capacity building. Talking to The Express Tribune on Monday, they shared their views while reacting to a programme titled "National Roadmap for Transition of Informal Businesses Towards Business Formalisation" recently launched by the Small and Medium Enterprises Development Authority (SMEDA) in collaboration with the International Labour Organisation (ILO), aimed at formalising the SME sector. They stated that for the programme to succeed, SMEDA and ILO should form a pragmatic policy offering loans at 1% interest for 15 years, which would encourage SMEs and entrepreneurs to formalise their units. Otherwise, so-called training, workshops, red tape, and capacity-building programmes are unnecessary and ineffective. Businesspeople are more aware than government officials and international non-governmental organisations (NGOs) of ground realities and how to do business. They added that existing financing policies often send foreign exchange abroad. For example, businesses typically use loans to buy machinery or fixed assets from foreign suppliers. By fostering Pakistan-based financing schemes, both SMEs and local products will benefit. The government should offer 50% of loans for infrastructure and 50% for raw materials. For instance, if an SME receives a loan of Rs50 million, it should be required to spend Rs25 million on infrastructuresuch as buildings, furniture, and office equipmentand the remaining Rs25 million on raw materials, or alternatively, Rs10 million on machinery and Rs15 million on raw materials. This approach would boost local businesses. Leading SME expert Syed Raza Hussain recalled that the Pakistan Industrial Development Corporation (PIDC) and Pakistan Industrial Credit and Investment Corporation (PICIC) used to offer long-term loans at 1% interest to promote indigenous industrialisation during the early 1970s. He stated, "The Federal Board of Revenue (FBR) poses a major threat to businesses, especially SMEs, because of its squeezing approach. It heavily burdens upright taxpayers instead of widening the tax net. For example, the FBR should focus on including new taxpayers in the tax net rather than imposing additional taxes on already-registered taxpayers. The FBR should be given a target to expand the tax base rather than simply increasing tax collection." Discussing challenges faced by economic establishments, Hussain, who is also the former president of the Federal B-Area Association of Trade and Industry (FBATI), noted that hundreds of SMEs have shut down from 2020 to 2025. The first economic meltdown occurred during the COVID-19 pandemic in 2020, causing serious financial challenges, followed by the rupee's devaluation, higher energy tariffsincluding steep increases in electricity, gas, and petroleum pricesa ban on imports during 2022-2023, and high-interest rates. Many SMEs, reliant on imports, suffered significant losses due to the import ban and the rupee's depreciation. FBATI President Sheikh Muhammad Tasheen praised the government's efforts to elevate SMEs, noting that business-friendly policies implemented on a sustainable basis would significantly boost the country's GDP. He stated, "The government should also introduce incentives for SMEs, such as access to affordable and easy credit, subsidies on utilities, and export rebates to help micro businesses grow into small enterprises, small enterprises into medium businesses, and medium businesses into large-scale operations."
