The secretary informed the Senate Standing Committee on Industry and Production, chaired by Senator Aoun Abbas, that the government is shifting away from non-essential business operations. This move is part of a broader strategy to streamline operations, and efforts are underway to reassign affected employees to other institutions.
During the meeting, it was revealed that the federal government has given Utility Stores two weeks before their closure. The subsidy on items sold at these stores has already ended. The closure has caused concern among the over 11,000 employees, including 6,000 permanent staff and others on contract or daily wages.
The standing committee expressed strong objections to the decision to close Utility Stores, demanding detailed explanations from the industries secretary. Senator Aoun Abbas Bappi, the committee chairman, voiced surprise and dismay at the lack of prior notice about the closure, questioning the fate of the employees and their potential unemployment.
Prime Minister Shehbaz Sharif has requested suggestions for an alternative system to replace Utility Stores and has instructed the management to expedite the settlement of transactions with companies. There were also proposals to use Utility Stores to distribute cash to BISP beneficiaries. The recently introduced Rs60 billion subsidy was terminated two days ago.
Additionally, the meeting included a briefing from the Engineering Development Board (EDB) on the electric vehicle policy. The board highlighted that local car manufacturers have not met export targets due to insufficient local auto parts production. The committee chairman suggested reconsidering the export targets, while the EDB recommended providing incentives to boost exports instead of withdrawing targets.
Senator Saleem Mandviwala noted that high taxes contribute significantly to the high cost of cars in Pakistan, suggesting that reducing taxes could make vehicles more affordable. A private company CEO indicated they would lower vehicle prices if taxes were reduced.
The EDB reported that the Auto Export Policy 2021-26 had set export targets between 2% and 10% annually, but these were established without industry consultation. The board proposed offering incentives, such as a $50 facility for each exported motorcycle, to support car exports.
Utility stores stop selling sugar due to excise duty
The policy has licensed 45 companies for electric vehicle manufacturing. In 2021, the highest production was around 300,000 vehicles. For 2023-24, 10,378 hybrid vehicles and 20,811 electric bikes and rickshaws were produced. The EDB has licensed 44 companies for two- and three-wheeler electric vehicles, emphasizing that unapproved vehicles cannot be used on roads.
The EDB also mentioned that car manufacturers have incurred fines totaling Rs5.32 billion over the past three years for late deliveries. The committee chairman has demanded a detailed account of these fines and a transparent tracking system from booking to delivery on a dedicated website. Manufacturers who fail to export 7% of their production will face fines, with the penalty expected to increase to 10% in the next financial year.
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