KARACHI: Muhammad Ikram Rajput, President of the Korangi Association of Trade and Industry (KATI), has urged the government to ensure that negotiations with the visiting International Monetary Fund (IMF) mission go beyond securing the next loan tranche and focus on easing conditions to accelerate industrial activity and boost exports.
He said the IMF visit is crucial for economic stability, but industrialists are increasingly concerned that stringent financial conditions are driving up production costs. Rajput noted that despite a significant decline in inflation, the high interest rate remains a major obstacle to industrial investment and called on the government to reduce the policy rate by at least three percent to provide relief to businesses.
He further emphasized that the documented manufacturing sector requires corporate tax relief, suggesting that the current 29 percent rate be lowered to improve competitiveness in global markets.
According to Rajput, high energy tariffs and the burden of circular debt have become serious challenges for industrial operations, making it necessary to freeze or reduce electricity and gas prices for industrial consumers to sustain export orders.
Rajput also stressed the need to broaden the tax base rather than placing additional pressure on existing taxpayers, urging the government to expand the efforts of the Federal Board of Revenue Pakistan (FBR) to bring new sectors into the tax net.
KATI President said the government should take the IMF mission into confidence on major economic measures, particularly energy sector reforms and plans for privatization of state-owned enterprises, to create space for industrial incentives. He warned that failure to address industry concerns during IMF negotiations could lead to factory closures, rising unemployment and slower economic growth, addingthat sustainable development depends on placing industrial revival at the center of policy discussions.
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