Burdening the already heavily burdened business community not a wise move

  • October 02, 2013
In the first meeting chaired by Shaban Khalid, President, Islamabad Chamber of Commerce & Industry, he protested against the hike in electricity and POL prices and called upon the government to immediately withdraw its decision to save the economy from its harmful consequences.

He said that given the inflation in the last couple of years, the average disposable income in Pakistan is low and it seems that policy makers are in disconnect with grass root level problems as they are taking decisions without considering their negative implications for common man and the business community.

He said the recent hike in POL and electricity prices would make the life of general public more miserable as it will squeeze their purchasing power leading to further decline in industrial and business activities as growth of business depends on purchasing power of consumers.

He said government has failed to improve unannounced load-shedding and upgrade power system, which is still plagued with line losses, power theft and inefficiency. Pakistan suffered a mammoth loss of Rs.150 billion on account of power theft and line losses in 2012-13 as stated by Secretary Water & Power before Senate Standing Committee in recent past. Instead of easier solution to pass on the more burden to the consumers, the government should focus on making DISCOs efficient.

Shaban Khalid said due to exorbitant energy prices, the cost of doing business in Pakistan is already very high versus profitability due to which industry is operating at breakeven levels and further hike in electricity and POL prices would almost cripple the industry. Increase in transport cost will have a multiplying effect on value chain processes and increase in production cost.

He said that government had already made 74 percent hike in power tariff for industrial and commercial consumers in August 2013 and another increase of 40 to 201 percent in electricity prices would create additional problems for trade, industry, economy and the general public. He said of the more than one million irrigation tubewells in the country, about 650,000 run on diesel engines and costly diesel would also affect the crop yields.

He stressed that subsidies need to be taken away from any industry, but the method and impact should be rationalized. Business community supports measures to direct the economy in the right path, but only those that may be justified.