PRIME Minister Imran Khan, on Thursday, presided over a crucial meeting of his economic team, deliberating upon serious challenges confronting the economy and issuing necessary directions to rectify the situation. He asked for a comprehensive plan within 60 days on revival of 687 sick industrial units, steps for promotion of Small and Medium Enterprises (SMEs), tax concessions for construction sector and strategy on sales tax on steel and cement.
The issues picked up by the top level meeting and the decisions taken indicate that the Prime Minister was determined to effect improvement in the current economic environment that is considered to be sluggish and as a consequence growth and development targets have to be revised downward time and again. Industrial development is key to progress and prosperity as increased industrial activity means more production, more jobs, more exports and resultant increase in much-needed foreign exchange earnings. Therefore, the revival plan for 687 industrial units is a step in the right direction and hopefully the plan to be submitted in two months will lead to their actual revival. The Government must have identified the causes but generally these are attributed to financial crunch, outstanding liabilities of commercial banks, high costs of production, law and order situation, electricity and gas load-shedding and partnership disputes. Law and order situation has improved due to sustained efforts of the agencies concerned but other issues like financial crunch, high cost of production, rising tariff of gas and electricity and huge backlog of disputes are there to haunt the industry. Revival might also require modernization and upgradation but the question arises whether one can afford to do that with the highest ever rate of interest that we have today? Similarly, increase in prices of gas and electricity, coupled with increase in taxes and duties have increased the cost of production and some industries even find it hard to pay salaries to their workers. If these issues are satisfactorily addressed then not only the sick units would revive but these would also encourage more investment and industrialization. The causes of the crunch being faced by the otherwise flourishing construction sector are also known and what we need is practical steps and not proposals and plans. SMEs are the real engines of industrial growth but despite repeated assertions of taking measures for their promotion, nothing worthwhile has so far been envisioned that could make a real change in the sector. A revolutionary policy is required to give boost to SME sector and this should be done in close consultation and coordination with all stakeholders.
