FPCCI urges govt to lower electricity and interest rates

LAHORE: Top officials of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Regional Chairman Zakki Ejaz and Vice President SM Tanveer, have urged the government to reduce electricity rates by 9.0 per cent and bring down interest rates to single digits. They cited the shutdown of industries and widespread job losses due to the high cost of power. They also rejected the proposed mini-budget, arguing that the country’s shrinking trade deficit and rising exports do not justify additional fiscal measures.

The officials pointed out that while the Federal Board of Revenue (FBR) has increased its revenue target, the government’s reliance on businesses for tax generation is unsustainable if industries continue to suffer.

SM Tanveer noted that the FBR has started filing cases against business individuals, compounding the pressures on the business community. He highlighted that although the interest rate has dropped from 22 per cent to 17.5 per cent, it remains too high for businesses to thrive. Tanveer also pointed out that the stock exchange has risen by 47 to 82 points, the trade deficit has narrowed from $27.47 billion to $24.09 billion, and exports have surged from $24.7 billion to $30.6 billion. Agricultural exports have grown from $4.7 billion to $7.1 billion, and IT exports have increased from $2.6 billion to $3.2 billion.

In addition, Tanveer expressed concern over the 18 independent power producers (IPPs) that have been issued notices. He advocated for the adoption of a ‘take and pay’ policy, where consumers pay only for the electricity they actually use.

He said that “efforts of the Special Investment Facilitation Council (SIFC)” resulted in the early termination of five IPPs contracts,” and called for swift decisions on the future of the remaining IPPs.

He also questioned why, despite inflation dropping to 6.9 per cent, the interest rate is still at 17.5 per cent. Tanveer demanded a significant reduction in interest rates in November, emphasizing that 2025 will be a crucial year for economic growth.

Tanveer further noted that bank deposits have surged from Rs22 trillion to Rs30 trillion rupees, signalling a positive economic trend. Reducing interest rates, he argued, would inject more liquidity into the market and stimulate growth. He urged the government to make prompt decisions regarding the 18 IPPs currently under review, stressing that such measures would help ensure that 2025 becomes a year of economic development and prosperity.