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Incentives for the industry to boost economy bearing fruits - Inside Financial Markets

Incentives for the industry to boost economy bearing fruits

– Associated Press of Pakistan

In the modern world, industry in any country provides a foundation for economic growth and well being of people. The states and the government always desire vibrant industry to avoid recessions and stand firm even during odd times.

For, this goal they put in all out efforts that not only boost their exports but also save from unnecessarily borrowing.

But slumps, corruption, nepotism and ad-hocism often jeopardize this growth and this happens very often in the developing states where the ruling elites ruin national infrastructure for their personal gains.

Pakistan also experienced this dilemma when during previous regimes the industrial sector was badly affected to poor policies. Many industrial units were closed down because of ill-conceived policies while those functioning had to reduce their capacity up to 40%.

The worst hit sector was the power loom where most of owners had to dispose of their machinery at throwaway prices.

However, the present government focused on industrial sector’s revival and formulated viable and business friendly policies. Economic situation world over due to Covid also provided local manufacturers in Pakistan to grab export opportunities.

The industrial units started their operation with the full installed capacity because of hefty export orders ensuring massive job opportunities.

The government very wisely handled the situation during the pandemic. It not only secured the jobs of workers but also accelerated the pace of industrial development.

The government focused on export oriented industry and maximum facilities were provided to these units while State Bank of Pakistan introduced out of box solution to extend financial support to the needy units.

The colonization industrial city M-3 has been geared up while Allama Iqbal Export Processing Zone is also nearing completion. The industrial units and SME sector has 30% more orders than their installed capacity.

It has forced them to expand their units and set up new units to fulfill the foreign commitments. It is expected that at least 4000 new air jet power looms will be added in the system which will definitely give a quantum jump to the national exports.

President Faisalabad Chamber of Commerce and Industry Engineer Hafiz Ihtasham Javed said it is very encouraging that Pakistan has achieved historic increase in export during October (US$ Two billion) to December (US$ 2.357 billion). “The increase was unexpected due to the domestic as well as global meltdown.”

“The government offered liberal policies for import of machinery under Long Term Financing Scheme. Under this scheme, various industrialists are currently importing 30000 to 35000 high speed air jet looms that would industry shift to digital machinery,” he said and mentioned to a few days back inauguration of digital high-end unit.

“This trend will help create maximum job opportunities and it is expected that during next two to three years around 10 million jobs could be offered in Faisalabad alone,” he claimed.

Hafiz Ihtasham said orders have been issued for speedy colonization of existing and new export processing zones under Faisalabad Industrial Estate Development and Management Company (FIEDMC). “We appreciate the serious efforts of the government in simplification of procedures, FDI and ease of doing business.”

The Government has also assured uninterrupted energy to five major export sectors fixing the electricity and gas prices at affordable rates, he said. “It has restored the confidence of industrialists and would help us to cross the target of textile export by 2025.

Former Vice Chairman Pakistan Hosiery Manufacturers and Exporters Association Kashif Zia said the government has successfully resolved the liquidity problems of exporters by speedy payment of rebate and refund claims.

“The government has maintained strategic balance in giving much needed confidence to exporters as well as payment of their claims.”

He said, earlier a major chuck of exporters’ finances was stuck up due to non-payment of refund claims. As, now the process of payments starts, it would definitely energized the industry. “Moreover, the proposed 5-year textile policy will help exporters to double their exports if the policies continued unhindered.”

Chairman All Pakistan Textile Processing Mills Association (Faisalabad Region) Sheikh Shahid Javed said that Faisalabad once considered as the Manchester of Pakistan had lost its glory due to faulty policies of the previous governments.

However, clear vision of Prime Minister Imran Khan to encourage private sector and make industry as engine of national economy, had started bearing fruits.

“We have 45% youth in productive age and the present government has provided such an atmosphere for industrial sector that would help create maximum jobs for unemployed youth,” he said. “It is encouraging that just few years ago the looms were being sold out at scrap rate but now they are working round the clock.”

He acknowledged efforts of the Prime Minister in controlling smuggling of cloth from India that was a major threat to local production of Polyester Chiffon. “Its import was 7.5 million to 10 million meter daily that has ruined local industry.

But, now the existing water jet looms installed in Gujranwala were working at full capacity to fulfill the domestic demand of Chiffon.”

Similarly, Shahid said, three units of water jet looms have been installed in Faisalabad and started working to meet the local demand.

“By providing relief in power and gas prices, the government has taken revolutionary steps and industrialist would definitely give a positive response to the government in stabilizing national economy.”

Syed Zaki Hussain

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)