PIAF urges govt to bring down markup rates

The Pak Banker - - 2national - Staff Re­porter

LA­HORE: Heavy de­pen­dence on for­eign and do­mes­tic loans, high markup rate, un­avail­abil­ity of gas and un­even eco­nomic busi­ness poli­cies are fast push­ing the econ­omy to the wall and un­less the govern­ment evolves a solid strat­egy to re­ju­ve­nate busi­ness and eco­nomic ac­tiv­i­ties in the coun­try, the sit­u­a­tion would re­main the same for years to come.

This was re­vealed in an an­a­lyt­i­cal re­port is­sued by Pak­istan In­dus­trial and Traders As­so­ci­a­tions Front (PIAF) Think-Tank here on Fri­day.

The Re­port pointed out that the State Bank of Pak­istan had raised the dis­count rate by 50 ba­sis points.

Ac­cord­ing to the re­port, the rate of in­ter­est in Pak­istan was the high­est that was not only cre­at­ing trou­bles for the man­u­fac­tur­ing sec­tor but was also hit­ting the ex­ports badly.

The in­ter­est rate in US is 0.25 per cent, in UK 1.5 per cent, in Canada 1.5 per cent, in Aus­tralia 4.25 per cent, in Ja­pan 0.1 per cent, in China 5.58 per cent, in In­dia 5.5 per cent and in Bangladesh 7.61 per cent. The re­port sug­gested to the govern­ment to im­me­di­ately bring down the markup rates to sin­gle digit to sup­port the tex­tile sec­tor which makes to 60 per cent of to­tal ex­port earn­ings.

The re­port in­vited the at­ten­tion of the govern­ment to­wards de­te­ri­o­rat­ing law and or­der sit­u­a­tion which is dis­cour­ag­ing both the lo­cal and for­eign in­vestors to put their money in any new ven­ture.

The at­mos­phere of dis­trust pre­vail­ing at po­lit­i­cal front also needs to be taken care of as it was un­duly vi­ti­at­ing the eco­nomic sce­nario and send­ing a very wrong sig­nal abroad, the re­port added.

About RGST, the re­port re­vealed that de­spite se­ri­ous busi­ness com­mu­nity reser­va­tions, the govern­ment was adamant to im­pose it that makes the point that the govern­ment was un­aware of the ground re­al­i­ties re­gard­ing the busi­ness sit­u­a­tion in the coun­try. The re­port termed the RGST as anti-peo­ple, an­tibusi­ness and anti-in­vest­ment bill that would open the doors of cor­rup­tion. He urged the govern­ment to with­draw the bill and con­tinue with zero-rat­ing regime for all the prod­ucts and raw ma­te­ri­als of five ex­port sec­tors.

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