A delegation of Nishat Group met Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh to apprise him of the damage done by Covid related economic downturn to large-scale manufacturers.
Advisor Commerce and Minister Industries were also present in the meeting apart from Dr. Ishrat Husain, Finance Secretary and Chairperson FBR who also participated in the meeting.
It was shared by the delegation that owing to Covid induced demand compression, size of balance sheets of large manufacturers is not maintainable. The major contributory factor is massive labour cost specially in labor intensive industries like garments sector. Any arrangements of avoiding permanent laying off or furloughs are putting excessive strains on the liquidity position of businesses, which are anticipating slow economic recovery, hence hedging against potential solvency issues.
The delegation head stressed on enhanced role by the Government to ease liquidity position of large businesses. The need for crafting scheme for cost sharing between public and private sectors was stressed.
The Adviser Finance empathized with the participants and updated them about the current status of implementation of PM stimulus package worth Rs 1240 billion. The delegation was asked to put up precise case for financial facilitation and its parameters as SBP has already been running a scheme for payroll protection.
The Advisor to the Prime Minister on Commerce desired for working out impact of reversion of orders by US, from China to other countries, and its potential impact for manufacturers in Pakistan.
The Minister Industries requested the delegation to provide details of proposal in terms of cost sharing arrangements along with details about requirements of different sectors so that Government could ensure balanced treatment to all key contributors to GDP.
The Adviser Finance concluded the meeting with the understanding that specific proposal be crafted regarding upscaling of existing scheme of SBP as too many interventions carry the risk of diluting the impact. He further emphasized that upper bounds of additional liability be calculated through defined parameters so that evidence-based decision may be shaped before next budget.
