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Pakistan’s tractor industry is teetering on the brink of collapse due to a mounting crisis triggered by delayed payments from major assemblers, Millat Tractors and Al-Ghazi Tractors. This financial distress has compelled nearly 250 suppliers to suspend operations, casting a long shadow over the entire industry.
The Root Cause
The heart of the problem lies in the government’s revised tax regulations (GST). Tractor assemblers are grappling with a severe cash flow crunch as they are unable to claim legitimate tax refunds. This liquidity crisis has cascaded down the supply chain, with delayed payments to suppliers becoming the norm.
Small and medium-sized enterprises (SMEs) forming the backbone of the engineering sector are bearing the brunt of this crisis. Without timely disbursements, these vital suppliers are compelled to cease operations, jeopardizing employment and economic stability.
Looming Shutdown
The repercussions are far-reaching. The industry is on the cusp of a complete shutdown as tractor assemblers themselves are at risk of closure. A prolonged absence of payments to suppliers will inevitably halt tractor production, triggering a domino effect with catastrophic consequences.
The Pakistan Automotive Parts and Accessories Manufacturers (Paapam) has issued a desperate plea for government intervention. The industry is seeking the prime minister’s immediate attention to avert a looming disaster. Unless the government swiftly releases the pending tax refunds, the tractor industry faces an uncertain future with severe implications for the economy and employment.
The survival of thousands of jobs and the contribution of the tractor industry to agriculture and overall economic growth are at stake. A timely resolution is imperative to prevent irreparable damage to this critical sector.
Call to Action For Government
The government must recognize the urgency of the situation and take decisive steps to restore financial stability to the tractor industry. By addressing the tax refund issue promptly, the government can help prevent a catastrophic collapse and safeguard the livelihoods of countless individuals.
Ultimately, the survival of the tractor industry depends on the government’s willingness to act decisively and provide the necessary support to restore confidence and ensure the sector’s continued contribution to Pakistan’s economy.
