I HAD set up a medium-sized polyethylene bag manufacturing unit in Larkana with a total investment of Rs7 million in 2007. But, unfortunately it crumbled in two months due to power outages, poor infrastructure facilities and security situation. Eventually it made me a loan defaulter and wiped out my remaining assets," said a Larkana businessman Mohammad Yaseen.

"I had to sell my house and the only shop at a throw away price to repay the bank loan," he said.

President Hyderabad Chamber of Commerce and Industry, Shafiq Qureshi, says industrial areas in Hyderabad and Kotri districts are in a pathetic condition. Local businessmen find the investment environment extremely poor.

"Industrial production in Hyderabad has plummeted by over 70 per cent and unemployment has increased by almost 60 per cent. The entire industrial sector is in dire straits because of energy crisis, declining investment, lack of government's interest in uplift of industrial sector, mounting input costs, unfair tax burden and, above all, the inflated electricity bills and the rising crime rate," he remarked.

The business community in Larkana says that owing to a lot of problems including frequent loadsheddings, some times as long as 17 hours, business activities in the district have declined by over 65 per cent.

Mohammad Ali, former president of Larkana Chamber of Commerce and Industry, said: "It appears that Larkana district, once known for its 400 rice mills, is no more on the Sindh government's agenda, as no industrial uplift plan has been envisaged and implemented here during the last thirty years."

He believes that industrialisation of the district needs an investment-friendly environment which should be created by the government in consultation with the local business community.

Officials in the Sindh Planning and Development Department say that the government knows about the pressing problems of the industrial sector and to address such issues, a number of uplift projects has been put in place.

According to an official in the provincial Industries and Mining Department, over Rs1.233 billion has been allocated in the ADP 2009-10 for 15 schemes. A sum of Rs687.83 million would be spent on industries-related sectors that include four sub-sectors (i) Sindh Small Industries Corporation (SSIC), (ii) SITE Limited, (iii) Directorate of Industries and (iv) Sindh Government Press.

Officials maintain that that most of the old ADP schemes were started in 2003-04 and 2004-05 and it was not possible to complete them this year as work on them was being carried out at a snail's pace.

Engineer Shamsuddin Sahito, Managing Director of Sindh Industrial Trading Estates Limited, blames slow manufacturing growth in the province particularly in rural areas due to lack of government's incentives and high tax rate.

He said: "If the government wants to improve the economic performance of the province it should introduce industry-oriented financial incentives, reduce tax rate and allocate more funds to strengthen basic facilities at the seven Site areas of the province."

However, Muhammad Zubair Motiwala, Advisor to Sindh Chief Minister on Investment, told this scribe that the provincial government was deeply concerned about the declining performance of the industrial sector and was implementing various uplift projects to inject new life into the sick industrial sector.

He said: "The Sindh government this time is trying to make the life of the investors comfortable by taking to task those unscrupulous elements, which are the source of worry for the investors. Effort is also being made to revive investment-friendly climate on a fast track basis."

Talking about revitalising the rural industrial sector, he said various areas had been identified and foreign investors were being lured to invest in manufacturing to augment production and generate more jobs.

In addition, the provincial government was committed to promoting value-added projects of the agro-based industries in rural areas, such as mango processing or vapourisation plants. Japan is a big export market for our mango and if mango is to be exported then it must be vapourised, he said.

"Japan has provided small plants for mango vapourisation, which are being installed in mango-producing areas of Sindh on commercial basis. Similar plants for value-addition of dates, banana and other local farm products aimed at increasing export to international markets would be installed soon in different parts of rural Sindh", Zubair Motiwala said.

He agreed that some problems were being faced by industrial estates and that except for Karachi all other Sites were semi-functional. Nevertheless, some projects included in the ADP 2009-10 were being implemented on a fast track basis to make them fully functional.

"To this end, the Sindh government has allocated Rs800 million for the development of the Site areas in the province, with major focus on improvement of water supply, road network, drainage and sanitation, mainly in Kotri, Hyderabad, Nawabshah and Sukkur, he said.