Slash in power tariff for SMEs to boost economic growth

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LAHORE: The electricity rates are very high in Pakistan and it is for the first time that power rates have been reduced. The decision would help boost economic growth, strengthen industry, increase exports, and create employment opportunities.

This was stated by Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) north zone chairman Adeeb Iqbal Sheikh, observing that the Energy Package announced by the PM would boost productivity, lower costs and generate employment. It will be an added impetus to our industrial sector that is driving the economic revival and posting robust growth.

According to reports, elimination of peak hours from electricity tariff of all industries, 50% discount on consumption of additional units for B1, B2 B3 connections till June 2021 and 25% discount on additional consumptions for all industrial connections for 3 years is really is great relief for the industry and we are very happy with this decision.

He welcomed the termination of discriminatory peak-hour tariff system for commercial electricity users, with provision of uniform electricity rates round the clock, stating the overall energy relief package will promote trade and industry in the country that had suffered losses in the past due to high cost of electricity.

PRGMEA NZ chief said that in view of boosting the production, it was vital to reduce the power price and eliminate the peak hours’ tariff system.

He added that the new relief package would help to expand employment opportunities, besides lifting economic activities in the country.

Pakistan’s exports have become expensive as compared to the regional and other competitors. The discounted power rates would provide a breather to the export sectors and indicate that the economy has now been moving towards the positive trend, he added.

Adeeb Iqbal said that a strong infrastructure of energy was vital to help industries grow and compete with international market. He pointed that with 25 percent expensive electricity rates, Pakistan lagged behind India and Bangladesh in terms of exports.

It is extremely important for Pakistan to strengthen industrialization, which will lead to wealth creation and thus help pay off the debt, he said.

He said that it is right step in the right direction that the Small and Medium Enterprises (SMEs) would be getting 50% tariff relief on the use of additional electricity, considering their bills of November 2019, during next six months, while all the industries would be provided with additional electricity on 25% reduced rates for next three years, he added. He said that it was for the first time that such a big reforms package in the energy and power sector had been announced for the industries with the fixation of tariff for three years. He said the way the whole nation fought the COVID-19 pandemic, early opening of businesses and the construction industry, and the policy of smart lock down which helped check the spread of coronavirus and death rate, pushed the wheel of economy running in Pakistan earlier than various countries.

The export industry is happy that the present government was bringing improvement in the power sector through various bold policy decisions.

He also applauded the government for making a power production agreement for alternative resources like solar and wind energies at the rate of Rs 6.5 per unit against the previous agreements of Rs 24 per unit.

The industry will get benefit of this relief package of consuming additional electricity when it expands which definitely takes time,” he said. He urged the government to reduce the tariff for existing use of electricity, which would really benefit the exports.