Islamabad Chamber of Commerce & Industry (ICCI) has shown great concerns over government’s move to eliminate subsidies on power tariff, fertilizer and sugar in the coming budget and termed it an unfavorable decision, especially in the given conditions as it will further hike inflation and cost of doing business in the country.

Chairing the meeting, Mr.Zahid Maqbool, President, ICCI said that business community is fully cognizant of the challenges being faced by the government in improving revenue collection. However, he said the better option of increasing revenue is to create enabling environment for growth of business & Industry rather than putting more pressure on already distressed people.

He said that inflation has already increased by more than 13 percent after coming down to 8.9 percent in October last year as the government phased out subsidies on electricity and adjusted prices of petroleum products. The new move will bring more miseries to people and dampen the growth of business activities.

The traders said that despite strong reservations of business community on VAT throughout the country, government is all set to introduce this tax from 1st July 2010 which will create backbreaking inflationary pressure while ending of subsidies will push more people down the poverty line.

They said even developed countries provide subsidies to their people as well as to agriculture, production and exports sectors in varying degrees and a developing country like Pakistan cannot afford to take such drastic measures.

Zahid Maqbool said government should first promote a conducive business environment and then think about phasing out of subsidies. He said the decision should be seriously reconsidered to save people and businesses from more avoidable pains.