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Textile lobby gets big monetary support to achieve target - LahoreEstate - 08-16-2009 05:18 AM
Sunday, August 16, 2009
By Aftab Maken
The textile lobby, the darling of every government either military or civilian, once again succeeded in getting a multi billion rupees support to achieve an ambitious target of $25 billion exports.
However, the concerned officials at the ministry of textile are answerless about dolling out this huge subsidy of Rs42 billion for this financial year and these (officials) are not even giving guarantee of enhancing the exports.
It is multi-billion dollar question and it is hard to digest that how the government of the day will arrange Rs42 billion for the blue-eyed textile tycoons.
Although the total support, which is actually a subsidy to the textile tycoons, would be close to Rs90 billion in the next five years to bring the export level to a figure of $25 billion against the current exports of nearly $18 billion.
It means that the federal government will inject one billion dollar in the ailing textile sector to milk seven billion dollar exports in the next five year.
This magical exports target of $ 25 billion seems to be another daunting task both for the textile sector and concerned authorities of the textile ministry.
The incentives include continuation of export refinance at lower rates, relief on existing long term loans, restructuring and reorganisation of the textile sector, drawback of local taxes, refund of past R&D claims and monetisation of PTA.
The incentive laden textile policy has every thing for all the sub-sectors of the textile, said one of the government official seeking anonymity told The News that it seems that APTMA, leading lobby and spokesman of the textile sector had written the policy.
The policy also announced setting up multi-billion funds like Textiles Investment Support Fund, Technology Up-gradation Fund (TUF), Infrastructure Development and Skills Development in the next policy.
The textile ministry, which acts as the mouthpiece of APTMA, finally caved in by offering subsidies for enhancing exports, which the previous regime had strictly not offered any lollypop in terms of incentives and subsidies for enhancing exports.
The new policy did not focus on increasing per unit value of the export products but only mentioned that Pakistan’s per unit value are lowest in the region.
Another thorny issue on which the policy remains mum is the strategy or policy how to tackle the gigantic power failure and with the absence of electricity and increased power tariff which is agreed with the IMF will be passed on Oct 2009 will not only increase the cost of production and no mechanism for overcoming this escalating prices of the power but also to compete with country’s competitors like China, India, Bangladesh and Sri Lanka.
Another major important input of the textile sector is availability of raw cotton at affordable price to make the products more competitive.
The policy has no plan for cheaper and constant provision of this raw material to the sector by saying that it does not lie in the ministry of textile’s provision.
With all these drawbacks and no check from the concerned quarters, the new policy not only seems to be ambitious but also not well thought out from the aligned ministries like ministry of commerce, industry and finance ministry.
aftab.maken@janggroup.com.pk
http://thenews.jang.com.pk/daily_detail.asp?id=193209