The recent tariff measures and removal of anomalies by Federal Govt, should result in supporting growth of LargeScale Manufacturing in Pakistan thus giving a positive signal to the economic observers around the globe.
The government has recently enhanced regulatory duty (RD) on imports to control the ballooning imports. The enhanced RD has been imposed on around 731 items including used cars, tyres, mobile phones, electronic goods, readymade garments, ceramics tiles, pulses, fruits, dairy items, sports goods, and cosmetics, etc.
The decision is being appreciated by the local manufacturing sector and they believe that the step will go a long way to decrease the import bill and improve the national economy.
“The government has taken a timely step to impose regulatory duties for which it needs to be commended,” said Salman Burney, Vice Chairman House of Habib, a renowned industrial group.
“This will give a dual benefit to the economy. By reducing non-essential imports it will reduce the balance of payments deficit, and it will also support the growth of local manufacturers, many of whom were being badly hit by under-invoiced imports and dumping,” he added.
Apart from controlling the budget deficit, FBR is also expecting revenues of at least Rs. 20 billion this fiscal through imposition of regulatory duty whereas the revenues from potential increase in manufacturing are also expected. “The decision would not only help in controlling imports but it will also generate additional revenue of Rs20-25 billion during the current fiscal year,” said an official of the FBR.
Pakistan’s trade deficit was recorded at $9.01 billion during the first quarter (July-September) of the current fiscal year as against $7 billion during the same period of the previous year showing an increase of 29.75 percent, according to Pakistan Bureau of Statistics (PBS). This may get decreased due to lesser imports of non-essential items.
The industrialists have predicted substantial growth in large scale manufacturing due to Govt support, which has already achieved recordgrowth of 8.5 per cent year-on-year in the second month of 2017-18, as per information of the Pakistan Bureau of Statistics.
The LSM target for 2017-18 is 6.3pc which will be within reach easily due to the curb on imported goods and increase in local production.