Prime Minister Shehbaz Sharif Unveils Sweeping Relief Measures for Industry and Exports
In a significant move to bolster Pakistan's economic landscape, Prime Minister Shehbaz Sharif announced a comprehensive package of relief measures for the industrial and export sectors on Friday. The announcement came during an award ceremony honoring top exporters for the fiscal year 2024–25, where the Prime Minister underscored the critical role of export-led growth in driving the nation's economic revival and long-term stability.
Key Relief Initiatives for Businesses
The government has implemented several pivotal measures to support industry and exports. Electricity tariffs have been reduced by Rs 4.04 per unit, providing substantial cost relief to manufacturing units. Additionally, wheeling charges for the industrial sector have been slashed to less than Rs 9 per unit, further easing operational expenses.
In a major boost for exporters, the export refinance scheme rate has been dramatically decreased from the current 7.5 percent to 4.5 percent. This reduction builds upon existing relief, as exporters were already availing a 3 percent discount on the State Bank of Pakistan's policy rate. The government has allocated Rs 1,052 billion for this scheme, with Rs 900 billion already utilized, demonstrating significant commitment to export financing.
As part of efforts to incentivize export-led growth, the Prime Minister announced that blue passports would be issued to award-winning exporters for a period of two years. This initiative aims to facilitate international travel and business engagements for leading export contributors.
Economic Stabilization and Future Growth Strategy
Prime Minister Shehbaz emphasized that while economic stabilization has been achieved, it alone is insufficient for sustainable development. He stressed that Pakistan must transition toward growth that is sustainable, competitive, and export-driven. "There is no other way forward. Export-led growth is the only solution for Pakistan's economic future," he declared.
The Prime Minister highlighted the government's focus on attracting foreign direct investment exclusively in export-oriented projects, which would help generate foreign exchange and strengthen national reserves. "This is a win-win strategy. It boosts exports and attracts investment at the same time," he added.
Reflecting on recent economic challenges, Shehbaz Sharif recalled that in June 2023, Pakistan faced severe difficulties with inflation at 32 percent and policy rates peaking at 22 percent. Through collective efforts, the economy has stabilized, with inflation now in single digits, policy rates reduced to 10.5 percent, and foreign exchange reserves doubled compared to three years ago. He acknowledged support from friendly countries including China, Saudi Arabia, the UAE, and Qatar in achieving this stabilization.
Structural Reforms and Compliance Measures
The Prime Minister warned that stabilization without growth would not address structural problems, noting increases in poverty and unemployment alongside unmet export targets. He urged the business community to increase investment and assured them that their recommendations would be implemented comprehensively.
Highlighting the importance of small and medium enterprises, PM Shehbaz called on banks to enhance lending to SMEs to promote entrepreneurship and diversify the economy. He emphasized that Pakistan must abandon the boom-and-bust economic model that repeatedly creates balance-of-payments crises.
On tax compliance, the Prime Minister issued a stern warning to industries against withholding taxes collected from consumers. He revealed that government action against sugar mills had resulted in Rs 50 billion in additional tax revenue over the past year, with strict enforcement to continue. Additionally, controlling petroleum product smuggling has helped collect an extra Rs 125 billion annually through the Petroleum Development Levy.
Credit for curbing smuggling in border areas was attributed to Field Marshal Syed Asim Munir, whose orders for strict action against smugglers and their supporters have been instrumental.
Digital Economy and IT Export Targets
The government is prioritizing the digital economy with ambitious targets for IT exports. Prime Minister Shehbaz announced a goal to increase IT exports from the current $3 billion to $30 billion within five years. He praised Minister for IT Shaza Fatima Khawaja for her dedicated efforts in advancing this sector.
The Prime Minister also acknowledged the contributions of Deputy Prime Minister Ishaq Dar and several cabinet members for their roles in economic reforms, privatization, and export promotion, describing the progress as a result of effective teamwork and selfless service.
Strengthening Bilateral Relations with Azerbaijan
In a separate development, Prime Minister Shehbaz Sharif reaffirmed Pakistan's commitment to strengthening bilateral relations with Azerbaijan across all areas of mutual interest. During a meeting with Representative of the President of Azerbaijan on Special Assignments, Khalaf Khalafov, in Islamabad, the Prime Minister stressed the need for regular and close coordination between the two nations to maintain regional peace and security.
Notably, both sides are close to finalizing an agreement for a $2 billion investment by Azerbaijan in Pakistan. Prime Minister Shehbaz reiterated his invitation to President Ilham Aliyev to undertake an official visit to Pakistan at his earliest convenience, conveying warm greetings and praising the Azerbaijani leader's wise and sagacious leadership that has elevated Azerbaijan's global profile.
In response, the Azerbaijani representative conveyed President Aliyev's warm greetings and lauded Prime Minister Shehbaz's vision and leadership, which have brought Pakistan significant successes in economic, security, and diplomatic arenas. He thanked Pakistan for its steadfast support during the second Karabakh war and reaffirmed Azerbaijan's longstanding position on Jammu and Kashmir.
The representative also delivered a letter from President Aliyev acknowledging the Prime Minister's appreciation for Azerbaijan's support in establishing the Asaan Khidmat Markaz in Islamabad, inaugurated earlier this month. Regional developments were also discussed during the meeting.
Ceremony Highlights and Ministerial Remarks
At the award ceremony, Prime Minister Shehbaz presented awards to the top 30 exporters and leading bankers for their outstanding contributions to the national economy during fiscal year 2024–25. Commerce Minister Jam Kamal Khan, speaking on the occasion, noted that Pakistan has emerged from a turbulent economic phase and is regaining international recognition due to the Prime Minister's vision and close engagement with the business community.
The comprehensive announcements and bilateral developments underscore the government's multifaceted approach to economic revitalization, combining domestic relief measures with strategic international partnerships to drive sustainable growth.
