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News

Raise minimum wage by 20 percent, Gohar Ejaz of APTMA urges govt

Says it’s a better option than expanding Ehsas Programme

March 19, 2021 05:16 PM


Gohar Ejaz, country's prominent textile manufacturer and exporter and currently Patron in Chief of APTMA, argued that the best way to serve the poor and disadvantaged working classes is to raise the minimum wage by at least 20 percent in the coming budget.

In explaining the most important economic challenge for the government, Gohar Ejaz proposed to Imran Khan’s government, that the biggest challenge it currently had was to help improve people’s lives. He argued that the best way to serve the poor and disadvantaged working classes is to raise the minimum wage by at least 20 percent in the coming budget.

Gohar Ejaz made this proposal to the government while participating in a TV programme Thursday night.

Ejaz is himself a leading textile manufacturer and has previously been Chairman of All Pakistan Textile Mills Association (APTMA), country’s leading association of exporters – sometimes described as the most powerful private organisation.

He admitted that if this proposal is implemented, by the government, in the coming budget, he too will suffer financial implications due to raised labour costs but he argued raising minimum wages will be a better option than expanding the scope of Ehsas programme as is currently being done by the government.

Current minimum labour wage in Pakistan is around Rs17,500 per month. Which the current government has increased from Rs16,000 – so an increase around 10 percent. But Gohar Ejaz pointed out that over the last two years Pakistani rupee has lost around 35 percent against the US dollar. He admitted that in recent weeks the rupee has strengthened back to around Rs156 against the US dollar from Rs168 against a US dollar which has never been seen before in the country’s history but even with this correction Pakistani rupee is still 35 percent less valuable than it was in 2018 when parity was around Rs125 to a US $.

Gohar argued that raise of minimum wage by Rs3,000-4,000, in both private and public sector will give more liquidity to poor households enabling them to spend more on food and daily articles of life. This empowerment with self-respect is much better than the direct cash payments by the Ehsas Programme which Imran Khan government is practising. In March, PM Imran Khan announced that from June 2021, the government will be making direct payments to around 30 million poor families enabling them to spend more on food items. Gohar was speaking in that context and made what he called his “humble submission”.

He explained that private sector companies have seen an improvement in profits in the past one year, however, the benefit of this will only go to the workers when the government increases minimum salaries. Over 10 million families are working or related to the private sector – an increase in minimum salaries will directly impact them and the economy.

Gohar applauded the government’s Naya Pakistan Housing Programme (low income housing) as a good initiative, given housing market’s linkages to 40 other related industries, the economy is already seeing the positive impact, as cement plants have started operating at 100 percent, glass furnaces that were closed during Covid have opened again, steel industry started booming. But he argued that the scope and size of mortgages given should be much bigger. Housing is an urban problem and not of rural Pakistan and offering housing mortgage products of Rs25 lakhs in this market is not a solution, such low amounts are not feasible amounts for construction in the cities. He argued that mortgage of up to Rs10 million, on five percent rate of interest, should be available to all Pakistani citizens irrespective of whether they are part of Naya Pakistan Programme or not, to expand the construction industries.

Gohar Ejaz is considered among those business leaders PM Khan listens to. It remains to be seen how PM Imran Khan reacts to his proposals – or the “humble submissions” as he calls them.



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