KARACHI - The slowdown in the sales of tractors in the recent months clearly shows that delay in tractor schemes announced by Punjab and Sindh governments is creating more issues for the local industry that is already in hot waters.

The total production of tractors from July to September was 7316 units while the total sales were 6745 units. Tractor sales recovered slightly last year in July 2014 and the sales touched 2767 mark, while in July 2015 the sales have declined to 1634 -- a significant drop of 41pc which is mainly being attributed to the delay in progress of these schemes.

‘The schemes announced by the Punjab and Sindh governments in the current budget are still dormant and both the governments have been silent since the announcement which is hurting the local tractor industry that has faced a drop in sales in the last 2 years,’ said a local tractor manufacturer.

It is pertinent to mention that the Punjab and Sindh governments recently announced tractor schemes in their budgets which would benefit the local manufacturers and farmers but so far the implementation has been delayed. The recent government interest in allowing tractors to be imported from Belarus has also alarmed local tractor manufacturers. They feel that with this move the government is going to further damage the already fledgling local tractor industry.

Director International Engineers Pakistan, Muhammad Jameel said ‘the government is allowing imports of tractors from Belarus, and this would disturb the local industry beyond imagination as 500,000 labour will be affected.’ He added that there are 400 vendors who have spent 40 years to bring 95pc localisation and now they are being rewarded by allowing Belarusian companies to import tractors in Pakistan.

Jameel said the government’s policies are hampering growth in tractor manufacturing, and it would let the agriculture sector suffer and to make farm mechanisation stagnant. It’s to be noted that in the mid 1990s the tractor industry showed fluctuating sales trends and sales lay in the range of 15,000 units to 25,000 units. Sales peaked in 1999 with the sale of 26,644 units.

Beginning in 2001, the industry began to flourish and gain momentum. This is evident from the upward trend in sales witnessed after the beginning of the new millennium. In 2001, tractor sales were 31,625 and by 2007 they had reached 54,098 units.

The industry continued to grow and production output increased to meet the increasing demand. Increasing mechanisation in farms was giving a boost to tractor sales and by 2010 the annual sales figure was 71,607 units.

In 2011, the trend continued and 70,770 units were sold. However, at the end of the year the government introduced 17pc GST which suddenly crippled the tractor industry and the effects were felt the next year.

In 2012, the sales of tractors declined to a shocking 48,120 units. The effect of the high GST on tractors became evident. The once flourishing industry was immediately affected by the policy negatively. In recent years, the GST has been reduced to 10pc but the sales have not picked up.