Power tariff-hike to destroy economy

FAISALABAD - Proposed increase of Rs1.2 per unit in electricity tariff would push the cost of exportable items, making Pakistani textiles costly and inflicting loss of millions of dollars. It will also cause closure of more industries as industrial sector will not be able to absorb this shock; leading to more unemployment & poverty in the country.
Khurrum Mukhtar, Chairman Pakistan Textile Exporters Association, and Vice Chairman Sohail Pasha said this while briefing the newsmen here Monday.
They said that increase in prices of electricity is adding up the production cost not only directly but also through trickle down effect on other inputs of production. Further overhead cost, other than production cost, also goes up cumulatively burdening the exportable goods cost in international market, they stated.
Pakistani exports are already under pressure due to prevailing economic financial, industrial crisis in the country as well as persistent law and order situation and the energy crisis which were badly affecting the industrial and trade activities, the productivity output and workers employment, they asserted.
They said, Textile exports of the country are crumbling and the industry and business were squeezing under severe credit crunch and unrealistically exaggerated credit rates, they explained and continued that the exports of the country which were major source of foreign exchange earning and this hike will notch the textile exporters a point down the ladder, eroding our competitiveness and throwing us out of our traditional markets being uncompetitive and costly, they said.
Khurrum Mukhtar said that hike in power tariff will also hit hard the textile industry, which is the growth engine of the national economy. Viewed in a broader perspective, hike in electricity prices will ultimately lead to great slump in business activities. It will further discourage the investment in the country as cost of doing business is a key consideration for an investor, he said.
He said that high production cost will promote culture of imports and will discourage industrialization in the country, which will, in the long term, prove harmful for the country. It will also unleash a new wave of inflation in the country and trigger a countrywide agitation apart from causing flight of capital, massive unemployment and decline in government tax revenues, they said.
The PTEA leaders stated that it is incomprehensible that on one side, government contemplates to achieve the targets for nominal growth of 2.5 percent but on other hand its inconsiderate and austere decisions to increase utility tariffs have already penalized the industry and posed as terrible threats for achieving the same.
At present, country is going through a worst economic crisis in terms of escalating cost of production/ manufacturing based on continuous rise on the utilities, they said.
In wake of such conditions, it is unjustified to enhance the tariffs, they maintained.
They demanded the government to facilitate exports as much as possible to meet export target for current fiscal year.
It will generate economic activity, productivity and revenue, they said. The PTEA office-bearers urged the government to work out long term plans for energy solution & revenue generation instead of resorting to unwise short cuts.