Govt asked to encourage manufacturing sector

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ISLAMABAD – The Pakistan Economy Watch (PEW) on Sunday asked the government to focus on development of manufacturing sector to ensure development. Manufacturing, one of the most vital parts of the economy, is a major source of jobs, contributor to a significant portion of taxes, driver for innovation and tool to meet many national challenges, it said. Lack of supportive policies shrinks manufacturing sector leaving country with a wide trade deficit as imports outstrips exports, said Dr. Murtaza Mughal, President PEW.

He said that rising poverty and falling exports can be tackled by paying due attention to the overtaxed and declining industrial sector which has been ignored since long leading to economic weakness. The influence, importance and share of sectors of the economy which are not as beneficial for the economy as manufacturing has been increasing which may be good for the few but it has little positive impact, he said.

Reforming the tax regime relieving manufacturing sector of the undue burden, protecting local industry from unfair competition, baring under-invoicing and introducing the proper taxation for real estate business can improve the situation.

He said that discouraging speculative trading and encourage genuine investors can also divert some funds to the manufacturing sector which are presently consumed by import trade, real estate and the stock market.

According to World Bank’s data the manufacturing percentage of GDP stands at 37 per cent in Belarus, 25 pc in Dominican Republic, 59 pc in Guatemala, and 59 per cent in Serbia.

Pakistan’s output is claimed to be 24 per cent of the GDP with textile production and apparel manufacturing largest contributors accounting for about 66 per cent of the exports and almost 40 per cent of the employed labour force which merits attention, he said. We can only meet most of the future challenges and brace for competition with other countries if we have a solid manufacturing base.

 

Courtesy: The Nation


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