Muhammad Saleem

Skyrocketing prices of electricity, gas and raw materials amid high taxation have shattered the confidence of businesspeople, especially small entrepreneurs. Tariq Mehmood, who runs a paper factory, told WealthPK that the situation for small businessmen in Punjab went from bad to worse due to rising energy costs and the government’s apathy. He pointed out that the high cost of energy was bleeding the small businesses. He said entrepreneurs were reluctant to embark on new ventures due to high production costs. He said the government’s claim of ensuring a business-friendly environment was unfounded amid rising energy costs and high taxation. “Businesspeople have been crying for competitive energy tariffs for months, but to no avail.” Mehmood said electricity and gas rates had gone through the roof amid rising raw material prices. “Now the Federal Board of Revenue is only adding fuel to the fire by harassing the businesspeople. How can businesses survive in these circumstances,” he deplored.

Zeeshan Khan, a teacher at a state-run university, said young graduates willing to launch their own businesses were dejected when they were unable to find a conducive business environment. “The government should devise favourable policies to promote entrepreneurship among young people,” he said while talking to WealthPK. He mentioned that multiple economic factors were contributing to the decline in confidence among small business owners, with unbridled inflation being the prime culprit. “The high inflation is eroding the purchasing power of businessmen and consumers alike, ultimately leading to a decline in demand for goods and services.” Zeeshan noted that the high interest rate environment had also dampened the business sentiment. “How can businesses borrow money for growth amid high interest rates?” he asked. He said that businessmen needed their growth and profitability, but economic conditions in the country were tough. The varsity teacher pointed out that in the recent past, the exchange rate volatility had also created uncertainty among businessmen, making it difficult for them to plan their operations.

Zeeshan suggested the government should reduce the tax burden, improve access to affordable finance, and foster investments in infrastructure development. “We need to promptly decrease energy costs, which are throwing a wrench in every business from small to large.” Tajamal Hussain, a trader, told WealthPK that the small business owners were facing challenges of unreliable power supply and poor transportation networks, disrupting their operations and driving up costs. He said mega factory owners had sound connections with the power muscles, but small business owners lacked access to power corridors, which was hindering their growth. Elaborating on his point, Hussain said the government used to announce subsidies for large industrial units but turned a blind eye to the issues of small businesses. “We lack access to bank credit, while big business owners can do it easily,” he complained. The trader said that small businesses couldn’t thrive in such an environment.

Credit: INP-WealthPk