While welcoming the incentive package for the construction sector and lowering interest rate to 9 percent, President SAARC Chamber of Commerce and Industry (SCCI) Iftikhar Malik suggested for a separate incentive package for micro, small and medium scale industries. These industries roughly provide jobs to 10 million people and contribute 70 percent of industrial output. Micro and small industries had sustained an appreciable growth rate during the past years, when medium and large scale manufacturing stagnated because of rising cost of production and not remaining competitive for technological reasons. The demand for a separate incentive package for micro and small enterprises is justified.
SCCI President has called for further lowering of interest rate to 5 percent and zero rate sales tax facility for all industries. The rate of interest was 8. Percent in the last PML-N government, but it did not help make manufacturing sector competitive because the industrial base of the country is stuck in the second generation technology and tariff of energy inputs was very high. Low rate of interest had pushed down national savings from 13 percent of the GDP to 8 percent. What will be the impact then on national savings, if the demand of lowering rate of interest to 5 percent is met? The zero rate sales tax facility on export products had been misused in the past and had to be withdrawn from four export industries.
