New industries offered 50 percent subsidy on utilities
TANVEER AHMED
KARACHI (April 27 2005): The Provincial Committee on Investment (PCOI) government of Sindh has suggested special incentive of at least 50 percent subsidy on utilities for one year to new industrial units to encourage new entrepreneurs and businessmen to come forward and invest. The rising cost of doing business due to high rate of different utilities mainly electricity was making it hard for industry to survive especially in free trade regime, PCOI official told Business Recorder here on Tuesday.

The recommendation of special incentive is the part of several other suggestions included in a working paper prepared by the PCOI Sindh on "Post WTO Scenario."

Apart from special incentive of subsidy on utilities, the paper recommends income tax holiday and concessions on corporate tax rate, which is the highest in the region as Pakistan having the highest 35 percent is followed by China 30 percent, Malaysia 28 percent, Indonesia & Korea 26 percent and Singapore 22 percent.

It also proposes the import duty relief due to plant location in under developed areas to enhance and encourage rapid industrialisation and suggests realistic and business-friendly deletion policy with restriction on auto industry to achieve 80 percent deletion to go to boost industrial activity.

Mentioning that the growth in the GDP of any country lies 75 percent in the hands of small & medium enterprises (SMEs), it says that in Pakistan this sector was being deprived of all kinds of favours at every forum.

"In the new investment policy, efforts should be made to provide maximum relief to this segment of economy by helping them to avail assistance from DFIs, banks on minimum collateral etc to start any new venture," it adds.

On environment side, it emphasises on enforcement of environment laws to meet the WTO challenges and effective enforcement of intellectual property rights (IPRs) regulations are need of the hour.

While on labour laws, it calls for further rationalisation of these laws in accordance with the International Labour Organisation (ILO) as part of social compliance and stresses for improvement of infrastructure to reduce commutation time to improve output and to save rising cost of doing business, which is main impediment to industrialisation.

The paper also mentioned the measures for rehabilitation of sick units, ready developed infrastructure on new sites, stoppage of smuggling & anti-dumping to protect local industry and lays great emphasis on export driven economy to create massive job opportunities.

Chief Operating Officer (CCO) PCOI Sindh Muslim Abbasi said that objectives of this working paper were to suggest measures to help local industry to compete in new trade era, which was facing fierce competition.


Copyright Business Recorder, 2005