Business leaders today issued a stark warning that crippling energy costs, nearly double those in competing nations, and an alarming exodus of entrepreneurs to Dubai are jeopardizing Pakistan”s economy, even as the provincial government announces new industrial incentives.
During a meeting at the Lahore Chamber of Commerce and Industry (LCCI), former President Mian Anjum Nisar highlighted that the industrial electricity cost in Pakistan stands at 12.5 cents per unit, compared to just 7 cents in India, China, and Bangladesh, rendering local industry uncompetitive. He expressed deep concern over the 5,000-7,000 Pakistani businessmen who register companies in Dubai annually, calling the trend “alarming” for the nation”s economy.
The stark reality of 3 million young people entering the job market each year was also raised, alongside a plea to resolve long-standing issues with Independent Power Producers (IPPs). Senior Vice President Tanveer Ahmed Sheikh added that some international companies are leaving Pakistan, urging the government to take immediate notice of the problems plaguing industries.
LCCI President Faheem Ur Rehman Saigol reiterated the call to reduce the cost of doing business, demanding that both power tariffs and high interest rates be brought down to single digits. He also voiced concern over the practice of shutting down industries without notice due to smog, noting that the industrial sector contributes only 9% to the problem and insisting the Chamber be consulted beforehand.
In response, Provincial Minister for Industries and Commerce, Chaudhry Shafay Hussain, outlined the government”s efforts to foster industrial growth, which he termed a “top priority.” He announced that industrial plots in estates would be offered at lower rates under a new rental policy and that decisions would be made in consultation with the business community.
The Minister detailed significant reforms, including the cancellation of 90% of plots in Special Economic Zones (SEZs) that had remained unused for years. Under a new policy, plots will be cancelled if production does not commence within two years. He assured that basic facilities, including security, housing, and banking, were being upgraded in FIEDMC and other industrial estates.
Hussain shared a slate of new projects, including the establishment of a Garment City, the upcoming local manufacturing by Vivo Mobile, and new ventures in the pharmaceutical, plastic, furniture, and lithium battery sectors. He also confirmed that machinery imports in free zones have been made zero-rated.
Expansion plans are underway for industrial zones in Sheikhupura, Vehari, Multan, and other cities, with a new 1400-acre industrial estate and Surgical City slated for Sialkot. The Minister also mentioned increased industrial cooperation with Iran and China, a push for solar and chip manufacturing, and the introduction of electric buses to combat smog.
To improve the ease of doing business, Hussain noted that Business Facilitation Centers are now issuing NOCs within 30 days, with more centers planned for other cities. He also pointed to a new agreement with the Hong Kong Trade Development council as a pathway for Pakistani businesses to access global markets.
While appreciating the government”s decision to withdraw the 16% sales tax on rental income and its efforts to fix wheat prices, the LCCI leadership stressed that more fundamental challenges remain. They called for a greater focus on promoting SMEs and cottage industries, establishing IT parks to boost exports, and improving vocational training to enhance the labor force.