KARACHI: Trade and industry leaders have described the budget as growth-oriented, and hope it would “induce investment, promote exports and also help generate more revenue to the national exchequer”.

Most business leaders were optimistic about the measures suggested in the budget, and believed they would encourage industrialisation to create jobs for the youth.

Contrary to the earlier fears that the government would be imposing new taxes, the business leaders were highly appreciative that no such measures have been taken. They thought that most revenue generating measures would now largely depend on either by bringing in new taxpayers or by encouraging documentation.

The textile sector, which is the largest industrial set-up of the country and contributes more in exports and job market, has been given a “full bag of incentives”, they believed.

However, most industry and business leaders said they would give their suggestions after going through the budget document.

Yasin Saddiq, the chairman of All Pakistan Textile Mills Association (Aptma), told Dawn that the incentive package for textiles is encouraging because giving 2 per cent duty drawback to processed fabric on 10pc incremental value and 4pc on made-ups would help boost exports.

He added that by extending customs duty exemption for another two years on import of textile machinery would help invite new investment in this sector.

Zakaria Usman, the president of Federation of Pakistan Chambers of Commerce and Industry (FPCCI), said that around 30pc of tax suggestions forwarded by the apex body of trade and industry have been accepted in the budget 2014-15.

The finance minister in his budget speech announced to set up a commission for bringing down sales tax in single digits, as suggested by the FPCCI.

Mr Usman said the trade and industry wanted export refinance rate reduced, and the government has accepted it by bringing it down to 7.5pc from 9.4pc. “This will help boost exports as the cost will come down.”

The FPCCI chief said the government’s move to bring retailers under tax net by registering them with sales tax would yield huge amount of revenue and it would also help document the economy. According to government’s estimates, there are around 2.2 million retailers in the country.

Abdullah Zaki, the president of the Karachi Chamber of Commerce and Industry (KCCI), said the government has accepted more than half of their demands and setting up of EximBank would help develop export culture.

The reduction in customs tariff from maximum of 30pc to 25pc, he said, would help check smuggling and mis-declaration and also reduce misuse of Afghan Transit Trade (ATT). However, he criticised the government for only exempting textile machinery from customs duty for another two years.

“If we have to industrialise our country, all categories of machineries should have been put under zero customs duty,” Mr Zaki said.

Fawad Ijaz Khan of Pakistan Leather Garments Manufacturers and Exporter Association (Plgmea) said that by increasing customs duty on import of raw leather from zero to 1pc will increase their cost of production.

He said the government should have given incentive package to other sectors of the economy as has been suggested for the textile sector.

Javed Bilwani of Pakistan Apparel Forum (PAF) said that by reducing mark-up on long-term financing facility from 11.4pc to 9pc, exporters will directly benefit up to 2.4pc.

The finance minister has suggested that Export Development Fund (EDF) board would be reconstituted. Mr Bilawani said it would help weed out corrupt and inefficient members from the board and help judicious use of funds contributed by exporters.

Meanwhile, builders and developers expressed high expectations over the measures taken in the budget to promote the construction industry.

Salim Kassim Patel, the acting chairman of Association of Builders and Developers (Abad), in a statement appreciated restructuring of the HBFC. He demanded Abad’s representative in board of directors of the HBFC to enable disbursement of loans to the middle- and low-income people.

Mortgage Refinance Company’s establishment is a step in right direction to improve liquidity in secondary market while the government’s share of equity of more than Rs1billion is also laudable, he said.

Low-cost housing is the need of the hour and allocation of Rs6 billion, although meagre, is welcome, he said.

Federal Excise Duty on cement at 5pc on retail price was not appropriate as cement sector was already paying sales tax, he said. “The government should abolish FED to stabilise the prices of essential building material.”

Published in Dawn, June 4th, 2014