Budget 2020 - needs to focus more on economic reforms.

Byline: Arooj Asghar

Like other countries, role of manufacturing sector in Pakistan's economy is of paramount significance. Enhanced exports are believed to benefit the country. Pakistan needs to strengthen this sector in order to enhance its exports which are concentrated largely in textile and semi-manufactures. Exports are dominated in foreign currency thus any change in the currency parities change the foreign exchange export earnings. Keeping this in view and in order to increase the export proceeds, Pakistan needs to enhance its exports of manufactured goods. Pakistan can enhance its external cost competitiveness in any sub-sector, including manufacturing sector, by reducing its unit cost of production relative to those of other countries. This can be achieved either by having lower input prices or higher productivity or a more depreciated domestic currency.

Presently, country's manufacturing sector recorded the weakest growth in a decade during the outgoing fiscal year 2018-19. Overall manufacturing has not shown a satisfactory growth. Similarly, large scale manufacturing and service sector and agriculture sector have also shown not so good performances in current fiscal year. Heightened political tension, deteriorating law and order situation, growing circular debt crisis, the cumulative impact of monetary tightening and rising cost of doing business are the reasons responsible for the poor showing of manufacturing in 2018-19.

Keeping in view the above, present government is trying to provide support to the manufacturing sector to boost the exports. Business community has proposed various suggestions to minimize the emerging threats to the industry. Since last two years, economy is under continuous stress therefore it is time for the new government to enable it to play its role in the growth of economy.

Engineering Development Board of Ministry of Industries is undertaking an exercise in consultation with the stakeholders to incentivize the domestic manufacturing industry. It is recommended that the rate of duty for various components be reduced to zero or minimized. Such measures will boost the growth of respective local industries and will also provide for additional employment opportunities.

Presently, seeds whether for oil extraction or for sowing purposes are exempted from customs duty but rice seeds are still liable to duty at the rate of 10 percent. Agriculturists demanded that In order to ensure healthy and quality...