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Event Title: Samsung is poised to enter the local market and has short listed two companies for local manufacturing after obtaining the authorization certificate, Ministry informed the Senate Body

Event Date: 2021-07-13

Meeting of the Senate Standing Committee on Industries & Production was held under the chairmanship of Senator Syed Faisal Ali Subzwari here at the Parliament House Today. 

The members of the committee received a comprehensive briefing from the Secretary, Ministry of Industries & Production on how the Industries and Production Division aims to facilitate industrial growth in the country. The committee also discussed the future plans and programs of Ministry and its attached departments.

 

Ministry officials apprised the committee members that 85% of the total mobile phones in the country are imported every year.   21 new companies have been authorized to start local manufacturing/Assembly (vivo, Airlink, Inovi, telecom, OPPO) boosting the local industry of the mobile handsets for domestic market and exports.

 

It was further informed that mobile handset industry giant Samsung is also poised to enter the local market. Samsung has short listed two companies for local manufacturing after obtaining the authorization certificate.

 

The secretary further apprised the committee members that R&D allowance of 3 % is given to local manufacturers as an incentive for encouraging exports of mobile phones. Locally assembled / manufactured phones are also exempted from 4% withholding tax on domestic sales.  Senator Walid Iqbal termed this initiative as a success story at the part of the Ministry of Industries and Production.

 

The committee participants also discussed in detail the Electric Vehicle Policy. Senator Faisal Saleem Rehman raised the question of energy consumption of electric vehicles. The committee was informed that there is ample capacity in terms of energy. The Chairman Committee sought comprehensive report and a survey regarding the charging stations and energy consumption by the electric vehicles.

 

The chairman committee added that different divisions should work in collaboration and in a conducive environment for such developmental initiatives. The committee was further informed that the EV policy approved by the Cabinet is for four wheelers, HCV’s and 2 & 3 wheelers. 9 models of 2 & 3 wheelers have been approved for manufacturing.

 

The committee was also briefed in detail on the Auto Development Policy. The committee was apprised that Greenfield is being granted to twenty one new investors with 10 % Custom Duty on non-localized parts and 25 % Custom Duty on localized parts for five years. Expected Investment under this policy was more than one billion dollar of which 504 million have already been invested.  Total capacity of the auto industry has been enhanced from 358,000 units in 20216) to 470,000 units in 2021.

 

The issue of “Own Money” exploitation in car sales was also raised by the attendees of the meeting. The officials of the Ministry debated that Own Money is primarily the issue of supply and demand benefiting the dealers only. The Ministry officials informed that basic reform has been introduced in booking and registration process of the car sales and additional WHT of Rs. 50,000 on the engine capacity up to 1000 cc, Rs. 100,000 on up to 2000 cc and Rs. 200,000 on above 2000 cc has been imposed. This measure has been introduced as a deterrent to the practice of ‘Own Money’.

 

Senator Fida Muhammad, while discussing the SME policy, raised the question of the role of Ministry of Industries and production in the field of Agriculture. “Pakistan is an Agricultural State and I don’t see any development plan for the agriculture sector.” he commented. Replying to the question of Senator Fida Muhammad the officials of the Ministry said that, Agriculture is the domain of Ministry of National Food Security and Research, however the officials of Ministry of Industries and Production informed that 90% tractors parts are been manufactured locally. And the rate of duty is decreased by 20% for 2 years if any Industry introduces new model of tractors.

 

The committee was apprised that amount of RS 60 Billion has been granted over a period of 3 years for National SME Action Plan. Simplified Taxation Regime for SME’s has also been announced. 0.25 % of gross turnover where annual business turnover does not exceed Rupees 100 million and 0.5 % of gross turn over where annual business exceeds rupees 100 million but does not exceed rupees 250 million.

 

A detailed discussion took place on the Utility Stores Corporation’s Financial Performance. The officials of the Ministry apprised the committee that there are total 4000 utility stores in the country and 900 franchises. The Ministry informed that we are making efforts to double this figure by 9000 through franchise system in the near future. It was informed that there was a significant increase in sale of USC from 10 Billion in 2019 to 114 Billion rupees in 2021.

 

A committee was briefed in detail by CEO of Pakistan Industrial Development Corporation (PIDC). The committee was informed that 35% of fruit was consumed by animals; therefore a model project for Fruit Dehydration Unit (FDU) in Swat has been completed for utilization of surplus fruit by the SMEDA. The total cost of this project is 59.9 Million Rupees.

 

The meeting was attended by Senators Walid Iqbal, Fida Muhammad, Faisal Saleem Rehman, Muhammad Abdul Qadir, , Saifuallah Sarwar Khan Nyazee, Hidayat Ullah and Senator Imamuddin Shouqeen, Senior officials from the Ministry of Industries and Production and attached departments.