Prime Minister Imran Khan has provided a huge relief for industries by announcing a reduction in power tariffs and other incentives. Businessmen have welcomed the decision and the stock exchange propped up as the premier announced the news.
The relief package will benefit small and medium enterprises (SMEs) which have been given a 50 percent reduction in power tariff on extra consumption, while other industries will be given 25 percent reduction. The government has also ended off-peak hours and has slashed the tariff on additional electricity consumed. This relief package is till June next year but can be extended.
Businessmen and industrialists have lauded the decision as the industrial sector was adversely affected due to the coronavirus-induced recession. The government has already provided several incentives to the business sector including soft loans, reduction in interest rates, as well as other fiscal and monetary decisions and manufacturing services still require further support to bring economic growth.
The current account deficit (CAD) has turned into a surplus for the first time in more than a decade. The commerce adviser said that exports have reduced to pre-pandemic levels and crossed the $2billion mark this month. The government wants to boost exports even further control imports. The reduction in power tariff will reduce production costs and this will could eventually lead to desired results.
Pakistan has one of the most expensive electricity in the region as successive government signed costly power generation deals which had a negative effect on the country. This was worsened by corruption scandals such as the IPP rental project case and the LNG case scam. Just last week, one of the world’s largest oil exploration firm ExxonMobil has to back out of a deal to set up at LNG terminal in the country.
This economic situation has caused anxiety among traders and businessmen and the masses are concerned about rising prices. It is imperative to bring industrialization to the country in order to generate wealth and reduce the debt burden. Our Industries need to become more competitive at both local and international levels and also increase production at the same time. The reduction in power tariff would certainly be a tough decision but is certain to have positive results in the future.
