Incentivizing Real Economic Activity Critical: Shahid Imran

LAHORE, (UrduPoint / Pakistan Point News - 16th Mar, 2025) Pakistan can lay the foundation for sustainable economic growth, reduce unemployment, and increase exports by regulating unproductive sectors, incentivising real economic activity and ensuring capital flows into employment generating industries.

Convener of Federation of Pakistan Chamber of Commerce and Industry's Regional Committee on food Shahid Imran expressed these views in a meeting with a South Punjab traders delegation led by Mian Zahid Iqbal Arain, here Sunday.

Shahid Imran said that incentivizing real economic activity is equally critical, therefore, the government should offer tax breaks, subsidies, and low-interest loans to industries with high job creation and export potential, like textiles, agriculture, IT, and manufacturing.

He said that the government must build a financial system that ensures capital flows into productive sectors. This requires reforming the banking sector to prioritize lending to small and medium enterprises (SMEs) and export-oriented industries.

Strengthening capital markets and encouraging venture capital can also support startups and innovative businesses, he remarked.

Shahid Imran viewed that unproductive sectors like real estate speculation and non-essential luxury imports, often divert resources away from productive investments. These sectors contribute little to GDP growth or employment while exacerbating income inequality. By imposing stricter regulations and higher taxes on such activities, Pakistan can discourage speculative behavior and redirect capital toward more productive uses. For instance, taxing vacant urban land and luxury imports could free up resources for industrial and agricultural development, he said.

The Convener said Pakistan’s economy faces significant challenges including trade deficit, low export level and high unemployment. To address these issues, he suggested, the country must regulate unproductive sectors, incentivize real economic activity, and create a system that channels capital into industries capable of generating jobs and boosting exports.