LCCI concerned over closure of tractor industry

The Lahore Chamber of Commerce and Industry (LCCI) has shown grave concern over the closure of tractor industry and called for its early revival. LCCI President Suhail Lashari in a statement on Friday said that tractor industry was not only an important source of revenue for the government but also providing employment to thousands of people directly and indirectly. 

He said that only two years back the production of tractor was over 70,000 units but during the current financial year, the production remained under 30,000 units, below 50 per cent of its installed capacity. “The reasons for this slow down are high tractor prices due to 10 per cent GST levied on tractors, high cost of production due to increased steel, electricity and furnace oil prices.” 

He said that fact remains that Pakistan produces cheapest tractors in the world but still this basic agriculture tool is out of the reach of even large landholding farmers. In Pakistan, a 50HP tractor is sold at Rs 700,000 while in India the same tractor costs over Rs 1,000,000, he added. 

Lashari further said that the tractors need to be subsidised until Pakistan at least matches the per hectare of India that stands at 2.5HP while Pakistan has currently 1.5HP and to match India’s HP per hectare tractor 800,000 more tractors will be needed. The LCCI President urged the federal and the provincial governments to support tractor industry to improve labour employment and overall economy. He said that the government should immediately reduce the existing 10 per cent GST on tractors with a view to sustain manufacturing growth. 

He said that the reduction of sales tax would help put the tractor industry and its allied hundreds of vending units across the country back on track, bringing tractor rates in the reach of small land-holders – a step forward in farm mechanisation, maximising per acre yield. 

The LCCI President said the reduced GST would continue to increase the sale of tractors and ease the problems being faced by the tractor manufacturers and the farming community, as after the imposition of GST, huge decline in tractors sale were seen. Quoting the figures of last year, the LCCI President observed that after cut in tractor production, about 28,000 workers had been rendered jobless while 600 parts vendors stopped their work. 

According to him, 95 per cent tractor parts are locally made, but tractor production was reduced considerably after levy of general sales tax. He said that the LCCI would extend all possible help to the auto industry as it is the mother of many industries. “The Ministry of Commerce would be updated on the tractor industry plight for an early action.” He said that the LCCI has decided to raise the issue of GST both with the federal and provincial governments to save tractor strategic industry for the agri economy. The LCCI President said that the economy would not be able to come out of woods until and unless a collective approach is adopted by all the segments. 

Copyright Business Recorder, 2013

Muhammad Ramzan Rafique
Muhammad Ramzan Rafique

I am from a small town Chichawatni, Sahiwal, Punjab , Pakistan, studied from University of Agriculture Faisalabad, on my mission to explore world I am in Denmark these days..

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