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Unemployment to reduce in coming days: Hafeez Sheikh

Lahore

October 16, 2020

Pakistan's de facto finance minister, Dr Abdul Hafeez Sheikh, has claimed that unemployment will sharply reduce in the coming days. Photo: File

LAHORE: Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Sheikh on Thursday said that unemployment graph would sharply be reduced in coming days following the steps taken by the government to bring the economy back to the path of sustainable growth.

He claimed that the PTI government faced challenges of high current account deficit and artificially high exchange rate when came to power. These are causing de-industrialisation, hampering exports and promoting an import-based economy.

In a meeting with the business community here at Governor House on Thursday, Hafeez Sheikh reiterated that the government was focusing on enhancing exports and in that context, duties on numerous raw materials had been reduced and energy had been provided at subsidised rates to export sector.

The delegation of businessmen was led by Lahore Chamber of Commerce (LCCI) President Mian Tariq Misbah along with Senior Vice-President Nasir Hameed Khan, Vice-President Tahir Manzoor Chaudhry, former presidents Abdul Basit, Irfan Iqbal Shiekh, Farooq Iftikhar, Almas Hyder, Shahid Hassan Sheikh and others.

Hafeez Sheikh said the government was committed to solve the problem of refunds on permanent basis and a lot of improvements had been made in this regard. Through the new refund system (Faster Plus), the private sector would be able to track the progress on their refunds. If there is a slight delay, the online system would apprise the particular business entity of the reason of delay.

He said the government was also working on reducing expenditures. After many years, the primary deficit has turned into a surplus. The COVID-19 adversely impacted the tax collection of federal government. However, the government facilitated the businesses during COVID-19 by introducing different schemes for deferring principal payments, loans for salaries, relaxation in energy bills for small businesses and tax breaks for the construction sector with all financial difficulties. Further, the Ehsaas Programme was started to give low cost loans to young entrepreneurs, he added.

Hafeez Sheikh said the government allowed the import of wheat to avoid food shortage. A comprehensive package was given to utility stores for essential food items. He said the SME policy was being formulated by the Ministry of Industries. Income Tax Refunds up to Rs50 million are being paid, adding the government is ready to bring the other potential sectors like Halal Food, pharmaceutical and others sectors.

On the occasion, Punjab Governor Chaudhry Sarwar said the government gave extra importance to private sector and was striving to keep a close liaison with private sector as they were the main source of wealth and employment. He said the government worked hard to reduce current account deficit from $20 billion to $3 billion. The government was committed to reducing theenergy cost for private sector by focusing on solar energy, he added. LCCI PresidentMian Tariq Misbah pointed out that the energy cost for all the export sectors needed to be reduced. The availability of gas for industry should be ensured round the clock. Small traders have suffered a lot due to COVID-19. He demanded the government give interest-free loans to the small traders and have a dialogue with them to know more about their problems.

He said the interest rates should be reduced in line with the regional economies in which the interest rates are much lower, adding the FBR has recently issued SRO 889 regarding the installation of surveillance cameras on factory premises to monitor goods production in various sectors. It will not serve the purpose of enhancing Tax Revenues and the implementation of this SRO be deferred and a better mechanism be put in place in consultation with the stakeholders. The incentives which are currently provided to the five zero rated sectors should also be provided to all the export-oriented sectors, including rice, halal meat and pharmaceutical and others.

The LCCI president demanded the government strengthen the price control mechanism and take all possible measures on priority to strictly control the price hike especially of essential food items.

LCCI Senior Vice-President Nasir Hameed asked for probing the causes of wheat shortage. LCCI Vice-President Tahir Manzoor said the trust deficit between the government and private sector needs to be bridged. He demanded the government focus on enhancing the exports of engineering sector.

The LCCI former presidents said the poultry industry had suffered a lot due to COVID-19. The cost of production for poultry industry is very high. In this regard, government should give export rebate to poultry industry and 25% subsidy on freight should also be given.

The business community demanded the refunds of small business should be released on urgent basis. Trust deficit between government and private sector needs to be finished. They said new gas connections were being provided on the high rates of imported RLNG while the old consumers were charged the old rate. On the model of electricity tariff, there should be weighted average rates for gas consumers. Enhancing exports is imperative to get the economy out of the current economic crisis.