Much awaited with trepidation, the budget speech last week left the business community, particularly the trade and industry sector, disappointed.
The general consensus is that rather than being leaders, trade and industry are becoming more like a reflection of the crumbling edifice that is this country. To further the rot, we were witness to one of the most disgusting and unruly displays of hular bazi and sloganeering in parliament during Finance Minister Hafeez Sheikh’s speech. The rumpus made sure that nobody understood what Sheikh was talking about and further solidified the impression that we as a nation are turning into zoo inmates.
While the finance minister’s speech left a lot to be desired, it was really disappointing that the issue of the imposition of 17 per cent sales tax on the import of machinery and equipment was not touched. As inflation rises to almost 14 per cent, the worst thing that could be done to the nation is increase the number of unemployed Pakistanis. The textile industry in Pakistan is not just the fourth largest cotton producer in the world but employs over 40 per cent of the industrial workforce. This one sector contributes a hefty portion, 38 per cent of total manufacturing and 8 per cent of GDP, to our economy. Although there is much hue and cry made by other sectors on how the textile industry has always enjoyed a "too favorable status", no one can deny that without it Pakistan would be sinking as a ship not just rudderless.
Despite all this, the government has felt it necessary to impose 17 per cent tax on plant and machinery which was previously cleared on a zero taxation basis. It’s not difficult to understand that this will further drive up the cost of increasing existing industries or setting up new ones. As a result, creation of new jobs would be almost impossible. It’s not as if the textile sector has remained quiet on this. The 14 day strike of the sizing industry in Faisalabad is ample proof that industrialists are trying everything in their power to make the government understand their woes, but is anyone listening?
This new tax is speeding up the downfall of the textile industry. Many units, whether spinning or garments related, have already closed down under the twin assault of rising load shedding and revised interest rates on previously doled out export refinance schemes.
We have no shortage of vision or entrepreneurs. Rather what we have is a shortage of realisation here. The realisation that we cannot take the country ahead without economic progress. The realisation that if we cannot match the incentives being doled out by India, Sri Lanka and Bangladesh to their respective industry, we should at least try to not impose new hurdles to progress on ours. The realisation that every job lost means more fodder for the militants to provide means of employment which is leading to our daily destruction in the shape of suicide attacks. The realisation that cannibalising one sector (textiles) has a cumulative effect in other sectors servicing it as well, and we all know what happens when that trail of dominos starts to fall, hyperinflation, and riots and in the end the very tearing apart of our way of life.
What we saw behind the finance minister in parliament was just a trailer. Let’s pray someone wakes up before we are witness to that same baying for blood in our streets as well.