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Industrialists concerned over gloomy conditions - Naveed Yaseen - 09-20-2008 01:13 AM
By Mansoor Ahmad
LAHORE: Economists, traders and industrialists are dismayed over the relaxed attitude of the government on the economy as either efforts are not made to stop its decline or the stakeholders are not being taken into confidence.
Trade and industry representatives were surprised by the exuberance shown by Federal Finance Minister Naveed Qamar at an Iftar-dinner in Lahore this week where he brushed aside any concession to the industry and
even went back on his words to provide R&D to the textile sector despite an allocation of Rs20 billion under this head.
They say the government has been working with a sole goal to increase revenue. To achieve it the government is targeting avenues from where revenues could be generated without much fuss and without any documentation.
They point out the tax evading sectors like stock market, property and traders are being ignored because of their political clout. At the same time the government has not provided any roadmap for economic recovery. The sectors in trouble do need some government facilitation and policy changes. They said the government has not even fixed any import target in its trade policy that clearly indicates the rulers themselves have no idea about the turn the economy would take in future. They said the government for instance provided another waiver to the capital market on capital gain tax.
However they pointed out the market has crashed despite this incentive. They said the government was unduly worried about the reaction of the capital market on introduction of transparent measures which would have been of short duration. They said the capital market would prosper in the long run if proper documentation is ensured. Similarly they expatiated property business is still not properly documented and is major avenue where black money is parked. The economists are puzzled while all the revenues are going. They said as far as tax revenues are concerned the government is above the target in the first two months of this fiscal.
They enunciated this fiscal the government earmarked a subsidy of Rs133 billion for electricity and Rs175 billion for petroleum products based on high oil rates of over $140 per barrel. They said the government increased the electricity rates first by 31 per cent then again by 31 per cent besides withdrawing 16 per cent GST on electricity. They said oil rates down by 40 per cent and electricity rates increased there would be no need to subsidize electricity.
At the most they said the subsidy in this regard would scale down to half. Similarly they added there would be need for subsidy on petroleum products.
http://www.thenews.com.pk/daily_detail.asp?id=136592