Budget: LCCI urges govt to address concerns ahead of NA debate
LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) has urged the government to ensure immediate consultations with the business community to address concerns before the National Assembly finalizes the Federal Budget 2025-26 where it would be presented for debate.
LCCI President Mian Abuzar Shad, Senior Vice President Engineer Khalid Usman and Vice President Shahid Nazir Chaudhry in a statement called for urgent revisions.
They said the government had projected GDP growth at 4.2 percent, up from the current 2.7 percent. They said the budget overlooks systemic flaws. 'The growth estimates ignore ground realities, high cost of doing business, energy shortages and inconsistent policies which are affecting industrial output. The government must revisit these projections to avoid fiscal shortfalls later.'
The LCCI office-bearers said the debt servicing still consumed a significant portion of the budget.
Mian Abuzar Shad said that IMF-mandated subsidy cuts which would hurt low-income groups.
They added that the imposition of an 18 percent sales tax on imported solar panels has also drawn sharp criticism.
They said that this move contradicts Pakistan's renewable energy goals, adding 'instead of taxing solar imports, the government should incentivize local manufacturing and R&D to reduce dependence on foreign products.'
Mian Abuzar Shad said that below the mark allocations would affect health, education and infrastructure. They said that slashing social sector funding for short-term fiscal adjustments will harm long-term growth. The government must rebalance allocations to prioritize human development.
The LCCI office-bearers said the business community was not satisfied on taxation measures at all and there was a dire need of revisiting these with the consultation of stakeholders.
They said the growth and tax targets should be revised realistically, focusing on expanding the tax net rather than overburdening existing taxpayers.
They demanded of the government to prioritize the construction of new water reservoirs and the modernization of existing infrastructure to address Pakistan's worsening water crisis. With agriculture contributing nearly 24 percent of GDP and employing over 37 percent of the labour force sustainable water management is essential for economic stability.
They said the work on Diamer-Bhasha Dam and other pending projects must be fast-tracked to enhance water storage capacity. They also suggested that the Public-private partnerships (PPP) should be encouraged to secure funding and expertise.
LCCI President Mian Abuzar Shad said the funds should be allocated for rainwater harvesting in arid zones to reduce reliance on groundwater, adding the industries should be incentivize to adopt water recycling plants.
LCCI President warned that without urgent action, Pakistan could face severe water shortages by 2030, crippling agriculture and industry. He said 'we need immediate investments in reservoirs, or our economy will suffer irreversible damage.'
The LCCI office-bearers said the funds for health and education should be increased to ensure sustainable development. They said the government should formulate a clear solar policy with consistent subsidies, net-metering rules, and support for local manufacturing.
The LCCI President urged the government to engage in immediate dialogue with stakeholders to address those concerns. He said the budget in its current form would risk stifling economic recovery. 'We hope the government will act on our recommendations before it's too late,' he added.
He said that as the National Assembly prepares to debate the budget, policymakers must incorporate feedback from the business community to ensure a balanced and growth-oriented fiscal plan.
Meanwhile, Sardar Usman Ghani, Central Chairman of Pakistan Hardware Merchants Association, while rejecting the decision to impose 18 percent tax on imported solar panels in the current budget, has warned that the move would cause irreparable damage to the process of generating cheap and clean electricity. He said it was incomprehensible that the Minister of Finance had given that explanation to protect the local solar panel manufacturing industry, firstly the solar panel industry was almost non-existent in Pakistan and secondly, that move would significantly increase the prices of solar panels. The protection to industry at the cost of public is not a step towards right direction. Public representatives in the government and opposition parties do not allow it to be approved in the budget.
Copyright Business Recorder, 2025
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