Tuesday, February 7

Rupee deprecation results in price hike

Karachi: The Union of Small and Medium Enterprises (UNISAME) has invited the attention of the government to the harsh effects of rupee weakening and the hardships faced by the SMES.

President UNISAME Zulfikar Thaver said the benefit to exporters is only short-lived and temporary and only for one or two transactions as the domestic prices of all items have increased, simultaneously.

The SME exporters could not benefit due to the increase in prices of raw material and inputs and freight and in fact the benefit of 5 % is nullified by doubled increase in prices of inputs.

Even the farmers are finding it difficult due to increase in prices of farm inputs and have raised their selling prices, he said.

The foreign buyers are asking for reduction in prices to take advantage of the devaluation and not are accepting the earlier agreed prices. The exporters are compelled to oblige.

It is unwise to devalue the rupee and the government should have taken other steps to reduce cost of production, productivity, efficiency and competitiveness.

Thaver urged the government not to devalue Pak rupee further but instead reduce the cost of doing business.

UNISAME has submitted budget proposals to reduce import duties on raw and packing materials to make our domestic industry competitive, he said.

He demanded reduction in tax rates for SMES and salaried class.

Unisame has also proposed setting up of SME value addition bureau, SME technical institute and training centres under SMEDA.

There is urgent need to subsidize alternate renewable energy devices and financing on pay as you earn schemes. The sector needs credit insurance on low premium.

Thaver urged the government to increase the tax exemption limit to Rs6 Lacs and do away with the filers and non-filers concept as even the hawkers and micro entrepreneurs are paying taxes on mobile phone calls and purchases made for that matter even when a common man eats in a restaurant he pays tax.

The government knows very well the non-filers are the smugglers and the mafias so why not get after them rather than disturb the under privileged.

The Union chief invited the attention of the government to the need to facilitate the micro to medium sized entrepreneurs as they are the majority sector and have a huge vote bank.

Besides in the best interest of the economy they are the engine of growth and the vehicle for poverty alleviation.

Self-employment is best promoted by financing the entrepreneurs.

Like the Prime Minister’s Youth Loan scheme a scheme is necessary for those who are in their fifties and need financing.

Additionally the government needs to comprehend the fact that it is incumbent on the budget makers to realize the fact that the survival of the common man has become impossible because of increase in prices of the food items, medicines, clothing and transportation, said Thaver.