LAHORE: Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) on Friday appreciated Punjab Chief Minister for announcing 10,000 tractors scheme on subsidized rates to small farmers but suggested the government to divert whole subsidy to the overall production capacity of the industry for better results.
PAAPAM Senior Vice Chairman Mumshad Ali said here the government had announced to provide Rs 200,000 subsidy per tractor in the next fiscal year and the farmers with landholding of 12.5 acre or less would be eligible for purchase of tractor under the scheme.
He said, these schemes, with government’s contribution amounting to billions of rupees, were misused at the same time by the investors while availing cash subsidy and buying tractors under provincial schemes and selling them in the market at a price lower than the price being offered by the tractor manufacturers thereby affecting the business of both tractor manufacturers and the auto part makers.
The government, he added, should divert funds of tractor schemes to total production capacity of the country, giving subsidy on each tractor to avoid the misuse of scheme. In this way, every farmer would find the tractor easily at lower prices, eliminating corruption element from tractor schemes, besides bringing consistency in tractors production which had been suffering from ferocious cycle of boom and bust for a long time.
Mumshad Ali argued that increase in prices of tractors due to 17 percent sales tax in last regime had made it difficult for farmers to purchase new tractors especially in view of reduction in loans from ZTBL (Zarai Taraqiati Bank Limited), resulting in low production levels of the tractor manufacturing. But the present government’s decision to reduce it from 17 percent to 10 percent since July 1, 2014, had boosted substantially the sales of tractors.
