Arooj Zulfiqar

The government should take proper measures to improve the industrial sector’s performance in order to make it more competitive, said Muhammad Alamgir Chaudhry, Chief Executive Officer (CEO) of the National Productivity Organization while talking to WealthPK.“The manufacturing and production industries have the potential to increase the economic growth by reducing unemployment in the country. However, an effective strategy is needed to improve the performance of the industrial sector,” he said.

The industrial sector recorded a growth of 7.2 percent in FY2022 compared to 7.8 percent in FY2021. The sector’s performance is more dependent on the manufacturing sector, which has a share of 65.0 percent in the industry. However, within the manufacturing sector, large-scale manufacturing (LSM) holds 74 percent, while its share in the industry is 48 percent.

During the nine-month period (July-March) of FY2022, the QIM index posted a growth of 10.5 percent. The other components of manufacturing, small scale and slaughtering, posted growth of 8.9 and 6.2 percent, respectively. Thus, the manufacturing sector posted a growth of 9.8 percent, while mining and quarrying posted a negative growth of 4.5 percent.

Similarly, the electricity, gas and water supply — the other sub-sector of the industry — posted a growth of 7.9 percent. Finally, construction recorded a modest growth of 3.1 percent. Alamgir said, “One of the main obstacles to the industrial growth in Pakistan is the lack of adequate infrastructure. Our transportation system is inadequate and poorly maintained, making it difficult for goods to be transported efficiently and cost-effectively.”

“Power supply is also unreliable, which creates problems for the industries requiring an uninterrupted supply. These issues can be addressed through investment in infrastructure, which will facilitate the smooth running of industries.” “Another challenge facing Pakistan's industries is the high cost of doing business. This is due to a number of factors, including high taxes, import duties, and regulatory barriers,” he continued.

“Additionally, the high cost of energy and raw materials makes it difficult for the industries to remain competitive. To address this challenge, the government needs to provide incentives to the industries, such as tax breaks, subsidies, and streamlined regulatory processes, to encourage investment and reduce costs,” he added. Alamgir said supply chain management was also crucial to any industrial business. Businesses in Pakistan should focus on improving their supply chain management to reduce costs, improve efficiency, and enhance customer satisfaction, he added.

The National Productivity Organization CEO further said, “Innovation is critical to the success of any industrial sector because it can help improve the quality, efficiency, and competitiveness of products and processes. The government should provide incentives to the businesses that invest in research and development, such as tax credits, subsidies, or grants, to encourage them to pursue innovative solutions and overcome market barriers.”

Credit: Independent News Pakistan-WealthPk