Karachi: Mian Zahid Hussain, a prominent business leader, has lauded Prime Minister Shehbaz Sharif's relief package aimed at supporting Pakistan's export sector by reducing the Export Refinance Scheme (ERS) rate and lowering industrial electricity tariffs. However, he highlighted concerns over an existing cross-subsidy mechanism that imposes additional costs on exporters.

According to Pakistan Businessmen and Intellectuals Forum, the Prime Minister's package, which includes a reduction of the ERS rate from 7.5% to 4.5% and a decrease in power tariffs by Rs 4.04 per unit, is seen as a crucial step to prevent the collapse of the export sector. Mian Zahid Hussain emphasized that these measures are expected to provide necessary liquidity to small and medium enterprises, making previously unviable export orders feasible.

Despite the positive reception of the relief package, Mian Zahid Hussain expressed concerns about the Rs 7 per unit cross-subsidy embedded in electricity bills, describing it as a "hidden tax" detrimental to industrial competitiveness. He argued that this mechanism unfairly burdens efficient manufacturers, forcing them to subsidize inefficiencies in the energy sector, and called for a restructuring of the tariff regime to separate industrial costs from social subsidies.

Highlighting the competitive disadvantage faced by Pakistani exporters, Mian Zahid Hussain noted that the effective industrial tariff remains higher than those in regional economies, such as Vietnam, Bangladesh, and India. He urged the government to consider alternative funding mechanisms for social subsidies, like the Federal Budget or the Benazir Income Support Programme, rather than imposing these costs on exporters.

The business leader concluded by expressing support for the Prime Minister's efforts to transition from economic stabilization to growth, hoping that this relief package marks the beginning of a broader policy overhaul to eliminate cross-subsidies and enhance the competitiveness of Pakistan's export sector.