KARACHI, June 12: The KCCI on Saturday termed the 2004-2005 budget as growth-oriented and business friendly in which the government had focussed on SMEs.

The President KCCI, Siraj Kassam Teli told a press conference at the KCCI office on Saturday that the government has accepted majority of the KCCI demands out of 42 main proposals.

"It seems that the budget has been made in Karachi," he said welcoming the measure of keeping a one slab of sales tax instead of too many.

The government has focussed cutting the cost of doing business.

However, the government has skipped the business community's demand of zero per cent duty on the import of machinery.

He welcomed the measures and incentives offered by the government to promote small and medium enterprise culture.

"Overall the budget is a growth-oriented and the economy will take off as the government has made a lot of corrections in various sectors specially in the sales tax regime," Siraj said.

He was not satisfied with the cut in power rates by 58 paisa for industrial sector. "I think it is not enough," he said. There should be a uniformity in power rates all over Pakistan.

He was hopeful that the new GDP growth target would be achieved under the new budgetary measures.

Ex-chairman, Site Association of Industry, Zubair Motiwalla said the 2004-2005 budget looks more focussed on the development of the SMEs in Pakistan. Besides, the interest of the common man has also been kept in mind, which is evident from the decision of cutting import duties on new cars.

However, he said the increase of Rs70 billion in revenue collection target irk the minds of the business community as to where the government intends to cover up this increase despite cut in various taxes and duties. "It seems that the government has linked the revenue targets to the economic growth rate," he said.

As far as the foreign investment arrival is concerned, Zubair said that the new budget has nothing to do with it. Foreign investment and law and order situation go together and only improved law and order is a prerequisite for prospective foreign investment.

Vice President FPCCI, Haroon Rashid and former president, FPCCI, Iftikhar Ali Malik termed the 2004-2005 budget as business friendly, which is meeting the aspirations of general public.

They said that cut in power rates for industrial and commercial users would reduce the input cost of doing business and would ensure competitiveness in world markets.

Total development outlay of Rs202 billion is a record allocation in the history of Pakistan which would help in poverty alleviation and would be a catalyst in enhancing industrial activity, they said jointly in a statement.

They welcomed the cut in import duty on CBU cars and elimination of withholding tax on import of machinery by commercial importers.

The chairman, Site Association of Industry, Mohammad Nisar Sheikhani also termed the budget as balanced for the industrialists and more growth oriented for the SMEs.

However, the government's claim to achieve 17.1 per cent growth in large scale manufacturing sector does not impress as the employment opportunities have not increased.

Senior Vice Chairman, Site Association of Industry, Dr Mirza Ikhtiar Baig also termed the budget as business friendly and growth oriented at a time when domestic as well as WTO challenges are rising.

Vice Chairman standing committee on Housing and Construction Industry of the FPCCI, Munir Sultan said that the housing industry would boost with the elimination of customs duty and sales tax on varnishes and paints despite the fact that the share of these products in a project ranges between 7-7.5 per cent. However, this is first time that the housing and construction sectors have been given a lot of encouragement.

The chairman, All Pakistan Motor Dealers Association, H.M Shahzad hailed the decision of cutting import duties on CBU cars. The decision will force the local assemblers to improve their quality and cut prices in order to compete with imported cost.