Reviving dormant industries
The caretaker federal government has promised to activate dormant industries within one month, continue the industrial support package and pay refunds of Rs35bn by September 4.This was stated by the patron-in-chief of Pakistan Textile Exporters Association (PTEA), Khurram Mukhtar, after separate meetings in Islamabad on Wednesday with Federal Minister of Trade and Industry, Dr Gohar Ijaz, Federal Minister of Energy, Muhammad Ali and a member of Federal Board of Revenue.
The very announcement of reviving dormant industries holds profound significance not only for the industrial sector but also for the broader economy, export-led growth and improve the position of foreign exchange reserves. Pakistan, like many developing nations, has struggled with dormant industries due to a variety of factors including policy inconsistencies and macro-economic fluctuations. The consequences of these dormant industries are far-reaching, affecting not only local employment but also the overall economic health of the country. When industries lie idle, unemployment rates surge, leading to reduced consumer spending, lower tax revenues and ultimately dampened economic growth. The pledge to reactivate these industries in a swift timeframe is a strategic move that would lead to increased domestic production, reducing reliance on imports and consequently improving the trade balance. Moreover, the revival of dormant industries aligns well with the imperative of boosting exports. Export-led growth has long been recognized as a potent driver of economic development. By resuscitating industries that have the potential to manufacture export-oriented goods, Pakistan can enhance its global competitiveness and increase its share in the international market. The significance of exports goes beyond revenue generation; it impacts job creation, technology transfer and skills development. A thriving export sector propels innovation, encourages specialization and attracts foreign investment. With global markets becoming increasingly interconnected, a strong export sector can also serve as a buffer against domestic economic downturns, providing a diversified revenue stream. The promised continuation of the industrial support package beyond October 2023 is a reassuring commitment which will definitely encourage the industries. A sustained framework of incentives and support mechanisms is essential to provide the necessary stability for businesses to flourish. This predictability encourages investment, fosters long-term planning and helps businesses overcome potential challenges.