The Senate Standing Committee on Industries and Production, in a meeting on 22nd January, 2019 emphasized the need to take necessary steps for the promotion of the automobile industry.
The committee, which was headed by Senator Ahmad Khan, held a meeting in Islamabad where representatives from Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) were also present. The committee primarily discussed the ways that can help in promoting the automobile industry which in return would create a lot more job opportunities in the country. The job opportunities for the skilled and semi-skilled labour are solely dependent on the growth of the local industry which unfortunately has been the unresolved issue in Pakistan. The committee members were of the view that the exports of the country can only be increased if the industry sees major growth in its production. All the pertaining challenges and unresolved issues faced by the automobile manufacturers were discussed at the meeting and suggestions were being taken for their immediate solution. The issues confronted by the spare parts manufacturing industry were also kept under discussion because the growth of this particular industry would mean a less number of imports and economic stabilization.
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The representative of the Pakistan Association of Automotive Parts and Accessories Manufacturers told the committee they were representing more than 400 auto parts manufacturers from the local industry. These industries have provided a source of income to nearly 2 million people across Pakistan. The number can be increased if proper facilitation is provided for the sake of industrial growth. He presented the stats in front of the committee that reveals that an investment of $1.5 billion is expected in the automobile manufacturing sector. While the spare parts manufacturing industry is already contributing a hefty $1.24 billion in the country’s annual revenue. 70% of the parts of light commercial vehicles and 96% of the parts of tractors are already been produced by the local auto parts manufacturing industry. According to him, the reason behind the expensive local auto parts was the unavailability of the raw material in the country used in their manufacturing. Hence, the local spare parts industry is forced to import the raw material which results in the increased price.
The ban imposed on non-filers of tax returns on purchasing new vehicles by the previous government had brought the automobile business to a halt in recent months. He emphasized the need for lifting this ban on non-filers for the purchase of a new car that would boost up the industrial growth once again. It is to be noted here that in the mini-budget presented by the Finance Minister Asad Umar yesterday, included the lift of a ban on non-filers for purchasing up to the 1300cc cars, however; the tax amount might well be increased for the non-filers that are expected to encourage people to file their tax returns.
A representative from the Tractor Manufacturers Association was also present at this occasion who pointed out the fact that the import of used tractors had caused serious damage to the local industry. He laid stress on protecting the local auto industry which could only happen if an appropriate amount of duty is imposed on the import of used tractors. By doing so, the potential buyers would have to buy the locally manufactured tractors which will boost up the industry to a certain extent.
All the suggestions presented in the meeting were noted down by the Senate committee chairman Ahmad Khan. He then directed the Ministry of Industries and Production to take essential measures in reviving the local auto industry as well as developing the industrial sector for the growth of the country’s economy. He emphasized that the enhanced number of exports would give us a chance to bring about a revolution in the local industry setup. The facilitation infrastructure for the production of hi-technology engines shall be made sure to contribute to the conservation of our environment. On the issue of import duty, he directed the Federal Board of Revenue in clear words to reassess the current situation in the country and take the necessary steps to discourage the import of used tractors. The import policy shall be reconsidered for the revival of local tractor manufacturing industry.
The dependency of job opportunities on the local industry can only be resolved with the growth of the local industrial setup. Let’s see what the government has to offer in this regard and if they make any amendments to the current import policy.
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