LAHORE (Web Desk) - United Business Group (UBG) Patron-in-Chief S.M Tanveer has demanded that Federal Finance Minister Senator Muhammad Aurangzeb reduce power tariff to 9 cents/kWh and a mark up to 15% to witness growth in the national economy in terms of exports, investment and employment.
“These two steps would stimulate the industry with positive vibes,” he said.
He was speaking to the minister during his visit to the regional office of Federation of Pakistan Chambers and Commerce and Industry (FPCCI).
Saquib Fayyaz Magoon, Acting President of FPCCI, Dr Gohar Ejaz, former caretaker Federal Minister for Commerce, Industries, Investment & Interior, and Chairman of National Economic Think Tank, Zaki Aijaz, Regional Chairman and Vice President FPCCI were also present.
“The business community can generate taxes only if it is allowed to earn,” he stressed and added that a business-friendly environment can let the industry and trade grow to generate revenue.
He said there is no justification of exorbitant interest rates at 20.5 percent when the inflation has already come down to 12% in the country.
He stated that providing the industry with electricity at a rate of 9 cents/kWh would result in an increase of six billion dollars in exports, an additional demand of over 300 megawatts on the grid, revenue of Rs500 billion, and a reduction of Rs240 billion in debt servicing.
He suggested to the finance minister to divert Rs240 billion from PSDP to fulfill this cause.
Already, he said, the industry has been paying Rs240 billion in cross-subsidies and over Rs150bn in stranded cost.
He informed the federal finance minister that the business community cannot secure orders from the international market on the stance that the government was charging it more under cross subsidies. Why would international buyers prefer us against those from Vietnam, Bangladesh and others getting energy at cheaper rates, he questioned.
He said the export industry is dying down and Pakistan is losing market share at a faster pace because the electricity is being provided at more than twice that of competing countries.
Resultantly, he said, export capacity of $600 million/month remains unutilised in the country in a situation when a rapid increase in exports is the only remedy to meet $24bn/annum of gross external financing requirements, balance of payment issues, and job creation.
With the prevailing energy prices, he feared, 60-70% of industry will shut down, especially when domestic gas rates for industry have been increased manifold.
Tanveer said uncompetitive energy tariffs hindering export growth and investment in export sector.
He said everyone out of 228 chambers and trade associations throughout the country have become panicked after the announcement of the federal budget.
"Our group had envisioned $100 billion in exports by 2030 when we took over the FPCCI, and we are committed to achieving this goal. However, the current budget has significantly dampened our enthusiasm," he deplored.