June 06, 2006	Tuesday	Jumadi-ul-Awwal 9, 1427

KARACHI, June 5: Business leaders were taken aback when Minister of State for Finance Umer Ayub Khan suddenly concluded his budget speech in the National Assembly on Monday without giving details about fiscal and taxation measures to meet the enhanced revenue target of Rs835 billion out of the total outlay of Rs1.5 trillion for the budget 2006-07.

“We kept waiting till last to know what incentives and measures would be given for the industry and export trade which were presently confronted with high cost of inputs, thereby badly reducing profit margin and rendering them uncompetitive in the world market,” most business leaders opined when talked to Dawn after the conclusion of the budget speech.

It was generally felt that the minister suddenly changed his posture and tone of his speech on restarting after a 15-minute break for Magrib prayers. He mostly repeated what was already spelled out by him and it was shocking when he suddenly concluded the budge speech, business leaders said.

Korangi Association of Trade and Industry (KATI) chairman Gulzar Feroz said there were no details of fiscal measures and incentives for industry and export and hoped that they may be part of next day’s newspaper.

He said that as to how the government was going to meet the enhanced revenue target of Rs835 billion, from Rs704 billion of 2005-06, with a projection of 4 per cent deficit at Rs373.5 billion when no fiscal measures had been announced by the minister.

Except 2 per cent capital value tax (CVT) on real estate business and 5 per cent tax on rental income, the minister did not disclose any such measures which could ensure as to how the revenue target could be met. “I must say it was not a complete document and somewhere some thing went wrong,” he added.

He said the minister did mention imposing some tax on stock market or stocks but did not give any details or rate and nature of tax and during his second part of speech he seemed to be in haste and was breathing heavily.

Mr Feroz said that incentives announced for livestock and dairy farming would bring in revolution and generate jobs and increase exports of dairy products.

Business leader Sheikh Manzar Alam said that increase in tax exemption from Rs100,000 to Rs150,000 would give relief to fixed income group such as salaried class. He also appreciated reduction in income tax slab from 3.5 and 30 per cent to 0.25 and 20 per cent for salaried class.

KATI senior-vice president Masood Naqi said that there was no mention about industry and export and it seemed that the government was feeling that these two important sectors of the economy were not facing any problems. Whereas, he added that exports were faced with such challenges which could not be tackled by the industry and exporters alone and there was urgent need for drastic measures to save the country’s exports.

He also questioned the wisdom of policy-makers to further enhance the Public Sector Development Programme (PSDP) from Rs272 billion (2005-06) to Rs415 billion for 2006-07 whereas the current year’s PSDP was not fully utilised.

Undoubtedly, he said some measures and incentives had been proposed for agriculture sector but there was hardly any mention of the industrial sector. Even given details, he said, about incentives were not complete. Mr Naqi said most of the problems regarding the economy and its various sectors had not been addressed in the minister’s budget speech.

Pakistan Bedwear Exporters Association (PBEA) chairman Shabir Ahmed said that after experiencing $10 billion trade deficit, it seemed that the government did not feel that exports should be encouraged. However, he said the priorities of finance ministry had changed and it may have other way to meet the growing trade gap and for this reason they did not give any incentive to export trade and the industry which was presently faced with tremendous pressure on account of high cost of production and tough competition from other countries.

Port Qasim Association of Trade and Industry chairman Naeem Ilyas Khanani said that sudden rise in minimum wage from Rs3,000 to Rs4,000 would upset the industry as it had to pay towards social security and EOBI.

Pakistan Commodity Importers Association chairman Raees Ashraf Tarmohammad said that a record budget outlay of Rs1.5 trillion was a great honour and achievement for the nation. He said in 1999 the size of total national budget used to be around Rs400 billion whereas now the revenue budget alone by large had exceeded this target.

Mr Raees said that subsidy on pulses at import stage would greatly help stabilise prices in the domestic market and it was for the first time in the history of the country that subsidy was being given at import stage.