Delay in announcing textile policy criticised
The inordinate delay in the announcement of new textile policy (2014-19) is depriving textile sector of its due benefits, besides causing serious apprehensions and uncertainty in the major export-oriented sector. Official sources revealed the government announced several schemes in the budget 2014-15 as integral part of the new textile policy, but in the absence of any textile policy; the sector is not getting benefits from these schemes to improve its efficacy.
The Ministry of Textile Industry also showed serious reservations over delay in finalising the draft of the new policy and approached the sub-committee of the Economic Co-ordination Committee (ECC) of the Cabinet to convene an emergent meeting for early finalisation of the draft textile policy (2014-19), it was learnt.
Textile sector contributes about 55 percent to the country’s total exports, besides providing direct and indirect millions of jobs. However, the country textile sector is being run without a textile policy for about five and a half months, official sources told Business Recorder.
The previous textile policy (2009-14) expired on June 30, 2014, but it failed to meet the envisaged textile exports target of $25 billion, which is currently no more than $13.5 billion, said the officials, adding that main reasons behind the failure of the policy were non-implementation of different initiatives due to short releases of funds and energy crisis. For the implementation of textile policy (2009-14), t3he previous government had earmarked Rs 188 billion; on the contrary finance ministry released only Rs 28 billion.
The incumbent government initiated the process to come up with a more comprehensive policy to facilitate the sector aimed at increasing the textiles export to $26 billion in next five years. The Economic Co-ordination Committee (ECC) of the Cabinet met on October 30, 2014 to discuss the draft textile policy in detail and sought comments in various proposals given in the fine-tune the draft making it result-oriented. A Committee headed by Minister for Planning, Development and Reforms Ahsan Iqbal was constituted to review the draft policy till November 15 to meet this end after which it would be placed before the ECC for approval. However the process was delayed after serious differences reportedly emerged among key ministries on crucial parts of the policy, including, gas supply, Export Development Fund (EDF) and development projects.
Ahsan Iqbal sought proposals from all stakeholders’ ministries but several reportedly failed to give their input. After receiving a negative response, Ahsan Iqbal sought an additional month to finalise the draft and urged all ministries to submit their input, however the committee is yet to meet for finalising the draft policy, which is creating serious apprehensions among the stakeholders.
As announced in the finance bill 2014-15, a sum of approximately Rs 80 billion has been earmarked for the textile sector support schemes over a period of five years. Drawback for local taxes and levies would be given to exporters of textile products on FOB values of their enhanced exports on an incremental basis if increased beyond 10 percent over previous year’s exports at the following rates; garments four percent, made ups two percent and processed fabric one percent. The incentives will be provided to the exports made in 2013-14 (calendar year 2014) compared to exports made in 2012-13 (calendar year 2013).
However, chairman Pakistan Apparel Forum Javed Balvani termed the schemes impracticable as the country overall textile export increased only by one percent during last nine months of the current calendar year while exporters would benefit from the drawback schemes of local taxes and levies which enhanced exports beyond 10 percent over previous year’s exports. He further says that the government has yet to release the amount struck up under different schemes of the previous policy.
Chairman All Pakistan Textile Mills Association (APTMA) S M Tanveer told Business Recorder that the government approved several schemes in the budget 2014-15 which were the integral part of the new proposed policy. However, in absence of the policy, these schemes could not be implemented.