Value addition to save sagging economy of PakistanNovember 21, 2013
Karachi: The Union of Small and Medium Enterprises (UNISAME) has invited the attention of the government to the need to curb inflation and urged the government to adopt tactics other than increasing discount rate as Pakistan’s economy needs out of box thinking.
The government needs to rejuvenate the economy with positive policy of encouragement, support and facilitating commerce, trade and industry.
President UNISAME Zulfikar Thaver said the setback to the Pakistan rupee temporarily favours exports but in the long run will do more harm than good. The imports have become very costly and more so because the import duty is on invoice value converted into rupees and on top of it the sales tax and other levies are all on the invoice value.
The import of raw materials and packing materials is now increasing the production cost and the discount rate increase has increased the cost of finance and the manufacturers are compelled to pass the burden on the consumers which is not easy as it is reducing sales in domestic market due to falling buying power.
Due to the exchange rate the government seriously needs to consider reduction in import duties to make imports affordable otherwise it will destroy domestic industries.
The high inflation is affecting business, there are cost increases all over, every single factor of production, the maintenance and distribution cost have also increased he regretted.
He said the government will have to seriously think of ways and means to curb inflation as merely the increase in rate of interest will not be effective as the government will have to keep increasing the rate and it will be chased by further inflation.
He said that Pakistan needs to follow the prescription of expert economists who have underlined and advised the need for conducive environment for investors, increase in production, import of technology, value addition, no over spending and reducing wastage in every sphere.
There is no doubt that Pakistan has resources as every year we have the benefit of some bumper crops like rice, wheat, maize, cotton and sugar which makes us self-sufficient. Pakistan needs to carry out a value addition programme supported by a system of rewards and bonuses for entrepreneurs.