Government urged to review existing policies for tractor industry

Karachi: Following drastically low sales over the last few months, the tractor industry has urged the government to review the existing policies for the tractor industry.

According to AKD Securities, the tractor industry has been witnessing a sharp slowdown in volumes since the beginning of the current fiscal year, mainly on the back of the 16% GST imposition and dampened farmer economics. While GST was imposed in 4QFY11, industry sales volumes declined with a lag due to pre-bookings of tractors even as ZTBL tractor loans remained discontinued. With the onset of FY12 however, surge in urea prices coupled with a steep drop in cotton prices resulted in additional cost to farmers, which added to the burden of higher tractor prices (post 16% GST). Resultantly, tractor sales have declined by a staggering 78%YoY in 2MFYI1. To compound matters, news reports indicate that the ECC is considering allowing import of cars, buses and tractors on lower tariffs.

For these reasons, the tractor industry has appealed to the government to review the 16% GST decision; disallow tractor import; revive ZTBL loans and also to revive subsidy schemes like Benazir tractor or Green Tractor schemes.

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