Thanks to the government’s Agriculture Fiscal Package, the production of tractors has grown about 59.03% in 11 months of the fiscal year 2020-21 compared to the same period of the previous year, WealthPK reported.
Under the package, the government approved a sales tax subsidy of Rs1.5 billion on locally-manufactured tractors to help the industry come out of the impact of the Covid-19 pandemic, and to ensure motorisation of the agriculture sector. Under the subsidy initiative, the government withdrew 5% sales tax on locally-manufactured tractors for one year.
The tractor industry is one of the most advantageous export-oriented sectors of Pakistan. Domestic sales of tractors increased by 6,600 units (43.42%) in the first half of the fiscal year 2020- 21 to 21,800 units as compared to the 15,200 units in the corresponding period of the previous year.
Exports of Millat Tractors increased by 68% to $6.9 million during the first half of FY21 compared to $4.1 million during the corresponding period of previous year.
A 70% growth was witnessed in terms of quantity as 850 tractors were sent abroad during the first half of FY 2020-21 compared to 500 tractors in the previous year. Pakistan produces tractors in technical collaboration with foreign manufacturers, including New Holland Tractors and Massey Ferguson. According to the provisional quantum indices of Large-Scale Manufacturing Industries (LSMI) for May 2021.