KARACHI, March 22: The Federal Privatization Minister Altaf Saleem hinted on Friday of elimination of subsidies in the next budget as a part of structural changes programme in the national economy being recommended by an Investment Committee headed by him.

Outlining the objective of the recommendations his Committee is set to finalize by next month and expected to be incorporated in next fiscal year’s budget, the Privatization Minister said subsidies and artificial measures add to huge government cost resulting in mounting budget deficits.

During a meeting with Pakistan’s top business tycoons on Friday at the Principal Office of All Pakistan Textile Mills Association (Aptma), Saleem Altaf himself a scion of a leading business group agreed with industrialists point of view on the issue of high utility tariffs, particularly gas and electricity.

The minister said his committee is trying to see that the average rate of mark-up is also brought down.

Altaf Saleem said the government has already moved towards this direction and today the export refinance rates has been revised to the satisfaction of the industry and exporters.

He said once mark-up rates are brought down the cost of production will also come down, which will directly assist the industry to become cost effective as well as competitive in the world market.

However, the minister expressed his displeasure over the attitude of the trade and industry and said that whenever the government seeks recommendations and suggestion for bringing about a change for a better they do not come forward and once changes are announced a lot of criticism appears in the media.

He asked the Aptma members to come forward and submit some serious suggestion, which could be incorporated in his committee’s forthcoming proposal on structural changes which is under preparation.

Referring to a point raised by the chairman Aptma Nadeem Maqbool that the Securities and Exchange Commission of Pakistan (SECP) did not seek suggestions form the biggest corporate sector of the country the minister said that Aptma should submit these suggestion to him and he will submit to the President.

Nadeem Maqbool informed the minister the SECP has asked the stock exchanges to immediately implement the Code of Corporate Governance which had been notified without seeking views from the textile sector.

Disagreeing with some Aptma members, the minister said that many changes have taken place particularly with regard to raw material.

He said a few years back textile industry was getting raw cotton at Rs3,000 per maund where as world prices were much lesser but today the industry is getting raw material at much lower prices.

Altaf Saleem said, “we cannot suddenly divorce a system which had been there for the last 50 years and the government could not afford to damage growers interest.” Therefore, he said some more time would be needed to introduce free market mechanism.

The chairman Aptma Nadeem Maqbool expressed his concern over the declining trend in textile exports and said during Jan-Feb this year overall textile exports are down with yarn exports by 14 per cent, synthetic textiles by 27 per cent and knitwear by 10 per cent.

He said the EPB, in the Federal Export Board held on Friday, has confirmed that the export target for the year will not be met, and predicted export for the year at $8.5 billion.

Maqbool also raised the issue of raw cotton and said that TCP intervention is disturbing free market policy of the government and suggested that farm support programme should not be at the cost of the industry.

He further said that non-payment of sales tax refunds in time continues to be a major irritant in industry’s operations. He said the audit parameters should be redefined and in case there are problems in post audit, the industry could be held accountable at any later stage.