Lahore  - Punjab Government allocated Rs. Five billion to provide subsidy on 25,000 tractors, while the Sindh Government announced a subsidy on 29,089 tractors in the provincial budgets 2015-16. These announcements were hailed by Paapam members who have seen drop in tractor sales in the last 2 years due to economic hardships of the Farmer.

The Pakistan Association of Automotive Parts & Accessories Manufacturers however, suggested to both governments for diverting funds of Tractor schemes based on the total Production capacity of the country and shortage of tractor in the country. Giving subsidy on limited number of  tractor results in misuse of scheme and boom and bust for the tractor industry putting the vending units in financial hardships. If the scheme is based on 5 years on across the board subsidy every farmer will find the tractor easily at lower price, eliminating corruption element from tractor schemes, besides bringing consistency in tractor production. The industry has been suffering from ferocious cycle of boom and bust for a long time.

Mr. Mumshad Ali, Sr. Vice Chairman Paapam lamented that about 2 month has lapsed since the announcementof the budge but details of the tractor schemes have not been made public so far. This has resulted in slow down in tractor bookings as farmers wait of the scheme. The impact of these schemes would be felt in downstream industries as well as in the output of the agriculture sector. He said that the tractor industry in Pakistan is in the forefront of localization levels.  As such, the companies serving as vendors to the tractor industry are also expected to benefit from the announced scheme.