Economic Reform Package if implemented can bolster economy: Faheem-ur-Rehman Saigal
Our commercial counsellors and embassies must also do the needful in advocating investment potential of Pakistan: LCCI Vice-President
By M J Hayat
LAHORE: The government if implements its Economic Reform Package in letter and spirit, it can prove instrumental in the economic growth and development of the country. The decision of early reimbursement of Rs 200 billion refunds and removal of 0.3 percent withholding tax on filers are also commendable measures.
This was stated by Lahore Chamber of Commerce and Industry (LCCI) Vice-President Faheem-ur-Rehman Saigal while talking to Daily The Business here.
He said that the State Bank of Pakistan (SBP) rate of interest has been exorbitantly high and it must be brought down to five percent, enabling the local businessmen to avail cheaper funds for the trade and industry.
When asked what the government earlier had done with the interest rate by bringing it to five percent to six percent and no reasonable change was witnessed, he replied that he don’t believe in the notion as the economy grew and attained 5.8 percent growth rate. However, he admitted that the cheaper money was invested in non-productive areas, especially in real estate.
Talking about the tax collecting authorities, he said harassment of the tax collectors is also one reason due to which business activities have come to a halt.
The tax authorities need to change their attitude, the number of taxes should be clubbed into one or two taxes and the tax system should be made simple, enabling the businessmen to pay their taxes without passing and suffering through the intense procedures from paying taxes, the LCCI VP emphasized.
He also talked about the harassment and hurdle created by the Customs Anti-Smuggling Organisation (ASO) and Customs Intelligence and Investigation (I&I) authorities who for the sake of minting money illegally obstruct the import consignments in their way despite the fact that the consignments are cleared by the Customs authorities in Karachi.
The Customs ASO and Customs I&I should be stopped from this illegal practice and they should do their job while checking smuggling and smugglers who are fearlessly operating all across the country and none is there to question them, he stated.
He said that though the government introduced the Economic Reform Package with a delay, yet it is a milestone towards putting the economy on the right direction. “However, this is not the end but a beginning and revolutionary decisions are required to enable the economy to vie with the world,” Saigal said.
He said that overseas Pakistanis are an important component of the economy who have been ignored for so long. “The overseas Pakistanis have been remitting a big chunk of forex reserves which more or less is equal to the size of the value of total exports. “The overseas Pakistanis can play a vital role in building the economy on sustainable basis provided they are incentivised,” the LCCI pointed out, adding that the incentives will prompt them to send the remittances through the banking channels”.
In reply to a question about the positive results of the Economic Reform Package, he said that the positive results of the package will be seen only if the package is implemented as soon as possible.
“Many a times the previous governments have announced that the refunds of the businessmen would be reimbursed at the earliest but it never happened,” the LCCI Vice-President said, questioning how can such fake commitments on the part of the governments bear good fruits?
While talking about the non-filers real estate dealers, he said that the non-filers have been allowed to deal in real estate worth only Rs 5 million. “The limit needs to enhance to Rs 10 million for the non-filers as following the devaluation of rupees, the limit is nothing. If the limit is enhanced from Rs 5 million to Rs 10 million, the grinding halt to which the economy has met with, can come to an end.
“The black money holders are almost equal to that of the white money holders. They must be encouraged to convert their black money white and bring that into circulation instead of hiding the funds,” he believed”.
If the non-filers’ limit is extended, it will enable the economy produce business activities, thereby generating employments and strengthen the economy,” Saigal said.
“This was due to the poor regulatory measures of the government, he said, that the businessmen must take the responsibility properly using the funds in the productive areas in the larger national interest.
The government should bring down the interest rate immediately down to five-six percent, he suggested.
Shedding light on the inconsistent policies, he said that inconsistency in the implementation of the policies is also a reason that investors have lost confidence in our land.
“All over the world the governments come and go but they never discontinue the projects and policies of their predecessors whosoever they are? Unfortunately, this is what is happening in our country.
The government of one party when comes to power seldom continue even the good projects of the forerunners. This is why they play havoc with the sustainable growth and development, he said adding that we must ensure continuation of projects and policies whatever the government comes to power.
He quoted the example of the recent visit of the Chinese Ambassador to LCCI when he was asked as to why China is setting up its industry in other parts of the world, ignoring Pakistan despite the fact that both the countries enjoy all weather friendship, the ambassador replied that Pakistan is inconsistent in its policies’ implementation which has shattered the Chinese investors’ confidence.
You see, “Orange Train project is in limbo” this is one apt instance of the inconsistencies in our policies, he said, suggesting that there must be consistency in policy-making which must not be affected by whoever the party or people take up the rein of power.
Talking about the level of technological education and training, he was of the view that though there is abundance of cheaper labour in the country; however, it is non-skilled and raw-hand, which is also one reason of all our woes.
The government should pay attention to imparting training in order to turn the labour force into skilled one, he suggested, saying that the TEVTA-like institutions are also responsible for abundance of the non-technical labour force.
Expressing his dissatisfaction over the valuation of the imported goods, he said that the valuations of the imported goods need to be rationalised.
Highlighting the issue of 0.9 percent infrastructure cess, he said that the importers who are getting their goods cleared from the ports in Lahore have to face additional 0.9 percent infrastructure cess creating disparity in the cost of doing business“.
There is not too much profit margin. Businessmen are working on one to two percent margin and the additional cost like infrastructure cess are eating up the profit margin of the businessmen, thereby discouraging them,” he said adding that the government must take up the issue on priority basis ensuring ease of doing business.
The federal and provincials governments should decide the anomaly at their levels, enabling the businessmen conduct business with peace of mind, he underlined.
Talking about the illegal demurrage and detention charges by the shipping lines, he highlighted that they have no set criterion and worst is that the Customs Department and the government are never interested in regulating the shipping lines, adding to the cost of doing.
In order to bring in foreign investment, our commercial counsellors and embassies must also do the needful in advocating and highlighting the investment potential of Pakistan, he finished, concluding that India enjoys a visible level of its exports as its embassies and officers posted abroad are professionally advocating its products.