Representatives of the Ministry of Commerce, Trade Development Authority of Pakistan (TDAP) and others are expected to brief the Prime Minister and other officials concerned about proposals, initiatives introduced in the new policy, sources told Business Recorder on Thursday.
According to sources, the following proposals had been initially forwarded to the ministry as part of the STPF (2012-2015). TDAP/MoC had proposed that at least 5 percent mark-up support needed to be provided to export-oriented industries to stimulate new investment and encourage plant modernisation. The government shall provide mark-up rate support of 5 percent or the difference in mark-up rate between floating rate loan and LTFF rate, whichever is lower, to export-oriented manufacturing units in the following sectors: leather, engineering, food processing, including rice, horticulture, fruits, vegetables, marble and granite, sports goods. The total cost of the facility was estimated Rs 3 billion for three years.
The government has also proposed mark-up rate support for export finance. The export finance rate has gradually risen from three percent in 2003 to 11 percent. Hence export businesses needed support to defray their increased cost of doing business. The government shall provide mark-up rate support of 3 percent to exporters, only against their pre-shipment export loans, for eligible commodities under the SBP's Export Finance Scheme.
Besides, to give interim relief in the shape of ad hoc relief at the rate of 2 percent of FOB is proposed to offset the impact of higher cost of utilities and higher cost of doing business for exporters of following sectors: fish & fish preparations, fruits, vegetables, spices, meat and meat preparations, carpets and rugs, sports goods, footwear, leather products, surgical goods, cutlery, onyx products, pharmaceuticals, electric fans, transport equipments, electrical machinery, specialised machinery, furniture, handicraft and computer-related services.
There is also a proposal to set up Trade Facilitation Committees (TFCs) to provide a one-window solution to exporters/manufacturers. The TFCs shall be formed under the chairmanship of the Secretary, TDAP. Other members of the committees shall be: representatives of local police, utilities (water & sewerage, gas, electricity), customs, chambers, provincial secretary industries and secretary of the local government.
The shortfall of energy is hurting industries to achieve their production targets and they need support to transfer to alternate energy. The government is proposed to pick up some share in the cost of Coal Gasifiers and Boilers to be installed in export-oriented industry.
Certification of rice quality by accredited labs in Pakistan would enhance quality reputation of Pakistani rice in world markets. Full financial support has been proposed for upgrading labs at Lahore and Karachi managed by REAP. There is a dire need to give proper direction, guidance and encouragement to the services sector, which comprises 54 percent of national GDP. A proposal calls for establishing Services Export Development Board (SEDB) under the ministry of commerce. This Board shall undertake formal recognition of various sub-sectors in the services industry and work for the export promotion of services.
In order to enhance Pakistani exports to China and India, Islamabad needs to undertake targeted promotional efforts, undertaking different promotional initiatives including market research support to non-traditional exports, supplementing marketing efforts of private sector etc. The project needs Rs 2 billion for three years (Rs 250 million for 2012-13).
Leather is the third largest export sector in which substantial value-addition can be achieved by adopting modern production processes and creating trendy designs/finishes. Rs 100 million for three years (Rs 20 million for 2012-13) is needed to share 25 percent of financial cost of setting up of design centres and labs in individual tanneries.
At least 50 percent subsidy has been proposed for bio-equivalence/bio-availability studies to labs and pharmaceutical companies for locally-manufactured pharmaceutical products, as without such certification Pakistani pharmaceutical products are unacceptable in most foreign markets.
The government, for the first time, is going to propose subsidising 50 percent cost of plant and machinery for processing plants in Gilgit-Baltistan. From production to market, a large quantity of produce is wasted because of a lack of storage and processing facilities. Introduction of drying and food processing would add value to local produce and promote exports from this region.
Pakistan is the fourth largest producer of dates with Khairpur, Dhaki, Dera Ismail Khan, Dera Ghazi Khan, Turbat, Panjgur and Washuk producing excellent quality dates. Only 13 percent of the produce is exported as low quality products. A large portion is wasted because of the lack of processing plants.
The TDAP has proposed setting up of meat processing plants in bordering provinces and tribal areas to promote meat exports to Iran, Afghanistan and Central Asian countries. Mark up subsidy on loans at 8 percent or 50 percent of the prevailing mark-up rate, whichever is lower. To catalyse the modernisation of supply chain of Fruits and Vegetables by facilitating the private sector through acquisition of value-added transport equipment such as fixed refrigerated containers. A 10 percent subsidy of the total cost of fixed refrigerated containers.