Engineering Post Report
At least 300 tractor parts manufacturing small and medium enterprises (SMEs) have been forced to shut down their units amidst a total crash in the tractors demand along with a severe liquidity crunch following the suspension of refunds by the Federal Bureau of Revenue (FBR) to the tractor assemblers despite the bitter fact that it was due for a long time.
Due to the shutdown of the industrial units more than 100000 workers have already been laid off in and around Lahore during this unprecedented crunch period which was very unfortunate.A large number of jobless persons have also become shelterless following the closer of the units of tractor and ancillary industries recently as they were facing the current crunch following the devastating rains and floods.
According to the Pakistan Association of Automotive Parts & Accessories Manufacturers (PAPAM) sources, the closure of AGTL followed by Millat Tractors has further aggravated the situation.
Tractor production in the first six months of current financial 2022-23 was expected to remain around 10000 units averaging 1600 units per month which was far short of the industry’s breakeven point. The sources maintained following the review of the aggravating situation by the top office-bearers of the PAAPAM that if the industry somehow do not achieve 3000 units of average production per months in the remaining period of the current financial year then the industry will not be able to revive in the future. The representative body was of the considered opinion that it was essential for the federal government to take immediate and concrete corrective measures forthwith rather just keeping waiting till the next budget.. The sources concluded by pointing out that the tractor exporters also needed to be facilitated by the federal government in the prevailing circumstances as the current General Sales Tax (GST) regime was making Pakistani tractors totally non-competitive in the African market.