GUJRAT In the eyes of the business community in Gujrat the IMF package will work against the industrial sector. The proposed hike in mark-up would specially affect the already adverse business environment, say local industrialists while conceding that the package had, indeed, saved the government from the possibility of default on international commitments.

The monitoring, in fact, is likely to inject a sense of discipline in the financial sector which might work positively in the long run, they say, stressing that they may still cope with the challenges by increasing exports, but the government should take measures to maintain law and order and ensure power supply.

Mirza Muhammad Imtiaz Ahmed, member of the executive committee of the Gujrat Chamber of Commerce and Industry, said that keeping in view past experiences, the government should have thought twice before entering into yet another agreement, but circumstances once again forced them to knock at the IMF door.

He said that an increase of 2% in the mark-up would bring bankruptcy to many an engineering and textile unit. He apprehended that the GDP growth would not exceed 3% due to the current crisis.

Countries facing economic crisis, he said, generally opt for bringing down the mark-up ratio to support the industry, but in Pakistan that was not the case. He said the ratio of non-performing loans had been on the rise, but not much had been done on that count.

On the positive side, he said, the IMF monitoring of the national economy is expected to bring the missing element of discipline here. Together with falling oil and raw material prices in the global market, this can ease the burden on the industry, he said.

Taking the thread further, Haji Muhammad Ilyas, a former chairman of the Pakistan Electric Fan Manufacturing Association (Pefma), declared the IMF package as “a life-saving injection” for the country`s economy. A default on international commitments would have life miserable for the industry which would have struggled to import raw material. In that context, while the package may work against the common man, it was not that bad for the industry, he added.

Chaudhry Ali Usman, Senior Vice-Chairman of Pefma, believed that the withdrawal of subsidies would hurt the entire engineering industry under the IMF package and this may lead to shutdowns and retrenchments. He said the fan industry could still brave the challenge if the government could pass on the benefit of the decreasing oil prices to the industry and provide a stable political and law and order situation in the country.