KARACHI, June 6: Describing the budget 2005-06 as export and growth oriented, business leaders say the government has not come out clearly with any policies and measures that could help contain the rising inflationary trend on various essential items.

They feel that it is not clear as to how a cut in customs duty on raw materials and providing incentives to agriculture and livestock sectors will make a big impact in controlling inflation in the country.

“I do not see any measures taken to check inflation,” Karachi Chamber of Commerce and Industry President Khalid Firoz said.

But he termed the budget export-oriented and balanced. He said that budgetary measures like reduction in import duties on raw materials and some agriculture items would lure foreign and local investors of textile, leather, surgical and sports goods. “It will also open new jobs in the country.”

The KCCI chief said the government had focussed its attention on many sectors but it had not taken any measures that could check rising prices of essential items.

F.B. Area Association of Trade and Industry Chairman Rehan Zeeshan said the budget might prove good for textile and agriculture sectors but it has offered nothing to the common man.

“What steps have been taken in the budget to control rising prices of POL products, essential items of daily use, utility bills, etc?” he asked. “The government has not come out with any plans clearly to check the inflationary trend.”

Even the minimum salary increase of Rs500 to Rs3,000 from Rs2,500 is a peanut, as rising prices will eat away the benefit of this raise, he adds.

Korangi Association of Trade and Industry Chairman Abdul Haseeb Khan said the budget was much better than last year when it came to relief to the agriculture sector. He said that the industry and customers would benefit from the incentives given to the agriculture sector if they were properly implemented.

He said the new budget had failed to offer any benefit to the local industry and small and medium enterprises. “Incentives and packages announced for SMEs are still unclear and need clarification.”

He said the government had given some incentives to the exporters whose shipments were related to the post-WTO regime.

“I do not see any measures in the budget relating to checking and controlling inflation,” Mr Khan said.

Site Association of Industry Chairman Dr Mirza Ikhtiar Baig said that most the demand of the association had been accepted -– zero-rated sales tax on textile sector and a cut in customs duty on spare parts to five per cent.

He was of the view that the decision to set up a ‘business support fund’ for the promotion of the SME sector would create new jobs. He said that an allocation of Rs272 billion for the PSDP, up by 35 per cent from the last year, needed an effective policy for its proper utilization, as only Rs150 billion out of the allocated Rs202 billion were utilized last year.

He said the government had not met a basic demand of industry to bring the import duty on plant and machinery to zero from five per cent. He said the government had also not taken any steps to control inflation in the country.