LAHORE: Pakistan Association of Automobile Parts and Accessories Manufacturers (Paapam) has lauded the Sindh and Punjab governments’ announcement of giving huge subsidy on tractors.
The Paapam members said that the tractor industry witnessed decline in sales during the last two years.
The Punjab government has allovated Rs5 billion to provide subsidy on 25,000 tractors, while the Sindh government announced a subsidy on 29,089 tractors in the provincial budgets 2015-16.
Paapam, however, suggested to both governments to divert funds for tractor schemes based on the total production capacity of the country and the shortage of tractors. Giving subsidy on a limited number of tractors results in the misuse of scheme putting vending units in financial hardships.
Papaam Senior Vice Chairman Mumshad Ali lamented that about two months had lapsed since the announcement of the budget but details of the tractor schemes have not been made public so far. This has resulted in a slowdown in tractor bookings as farmers wait for the scheme.
Paapam Vice Chairman Iftikhar Ahmad added that such tractor schemes in Punjab as well as the Sindh government for providing cash subsidies to farmers will create an erratic demand in the market, resulting into a vicious circle of boom and bust in the tractor industry. He said that partial financing on a limited number of tractors in the past created distortion in the market of artificial demand surge followed by a lull.
