High borrowing rate, inflation, oppressive taxation negatively affect business: FPCCI

DNA

ISLAMABAD: The Presidential candidate of the Federation of Pakistan Chambers of Commerce & Industries (FPCCI) upcoming election for 2024 Muhammad Ali Sheikh has observed that the aggressive economic measures, high borrowing rates, inflation, oppressive taxation and unstable currency have been negatively affecting running businesses.

He said that constant hike in power tariff has pushed the electricity prices higher and added to the already soaring cost of trade and industry. He asked the government to shut down all expensive oil-based power plants to ensure availability of cheaper energy for consumers. He condemned the government for shifting power distribution companies’ inefficiencies’ burden to the consumers by jacking up the tariff under the guise of Fuel Charges Adjustment.

He said that high cost of doing business has proved to be dangerous for businesses, as ever-increasing cost of production is the real threat to the economy amidst frequent upward revisions in policy rate and continuous fluctuations in rupee against dollar.

Muhammad Ali Sheikh, who is nominated for the presidential post of the traders’ apex body’s election by the BMP, said that the government liquidity and external vulnerability risks are elevated and there remain considerable risks around to secure required financing to fully meet its needs for the next few years.

With a view to deal with fiscal challenges he asked the economic managers to work on the three-way strategy by implementing short-term goals that will help to keep generating resources for smooth fiscal operations, medium-term goals where the they should focus on financial inclusion, documenting the economy by designing a system where all businesses can be registered and properly document their income including collection of sales tax, initiating the process of privatization as well as improving governance by introducing reforms in each sector. As a long-term goal, the country must focus on improving its human capital, and revamping IT sectors by extending facilitations and providing all the requisite supports. In the same way, we also need to work on designing a comprehensive and proactive strategy to tackle challenges related to strengthening border security and implementing effective and comprehensive Anti-Money Laundering and Terrorist Financing measures holding accountable and taking to task all those who are involved in illegitimate activities, undermining both our economy and national interests.

The FPCCI presidential candidate of the BMP stated that the significant jump in electricity prices and hike in gas tariffs to meet the IMF condition will put additional burden of billions of rupee on consumers. He observed that it is unfortunate that the authorities in all governments continued to approve billions of rupees’ additional burden on consumers through a direct tariff increase and an indirect increase through the withdrawal of subsidies given to exporters and farmers earlier.

It is to be noted that the authorities had pledged to stop any further rise in circular debt adding that around Rs 250 billion was added to the gas circular debt annually though the actual figures are available with Petroleum Division.

Muhammad Ali Sheikh said that the economic managers did not have any pragmatic plan to address this liability, apart from asking for more loans to repay existing debt. Likewise, the target for current financial year’s exports is too low to meet the country’s revenue.