APTMA ‘rejects’ budget, questions credibility of PM’s textile package

Says exports will not rise with meagre allocations and unfulfilled promises

ISLAMABAD: In a move that will further widen the gulf between businessmen and the government, the textile sector questioned the credibility of Prime Minister Nawaz Sharif’s Rs180 billion textile package after the finance ministry allocated a meagre sum of Rs4 billion to fund it.

In a press conference attended by representatives of all the leading associations, the textile sector rejected the budget 2017-18 due to meagre allocations and increase in income tax and sales tax rates.



The budget is a sheer disappointment for the textile sector, as the government has allocated only Rs4 billion against a total textile package of Rs180 billion, said All Pakistan Textile Manufacturers Association (Aptma) Chairman Aamir Fayyaz.

He said that it was also a matter of prime minister’s credibility who announced the package but the finance ministry allocated only Rs4 billion.

In January this year, PM Sharif had announced the Rs180-billion package for a period of one and a half years to support nose-diving exports by lowering duties on import of raw cotton and giving rebates on exports. However, just after four months, the finance ministry partially withdrew the package by again increasing duties and taxes on the import of cotton for the sake of Rs10 billion revenues.

The PM’s package envisaged Rs7.3 billion per month rebate on export proceeds, which is expected to remain unfunded due to lack of budgetary allocations.

“The finance minister should honour the prime minister’s word and make Rs180 billion allocation in the budget before it is passed by the National Assembly,” demanded the Aptma chairman.

The textile ministry had sought Rs40 billion for the next fiscal year 2017-18 but the finance ministry did not agree, apparently to artificially show budget deficit at the lower end.

During the National Economic Council meeting, Finance Minister Ishaq Dar had assured the Punjab chief minister that the federal government would provide adequate financial resources in the budget to support the textile sector. However, it did not happen.

The partial funding of the package is a joke, as exports cannot be revived on mere official pronouncements, said Fayyaz. He said that when the PML-N government came into power the country’s exports stood at $25 billion that have now slipped to $20 billion under PM Sharif’s watch.

The Aptma chairman said that at a time when Pakistan’s exports were on decline, Bangladesh, India and China have increased their exports.

The meagre allocation for the textile package is likely to further widen the trust deficit between the business community and the government. The industrialists have already shown their unhappiness over the extension of Super Tax into a third year, which was contrary to the promise made by Dar.

For the outgoing fiscal year, against Rs9.7 billion in claims, the finance ministry released only Rs2 billion to pay rebates.

In the given circumstances, it is difficult to achieve the overall export target of $36 billion or 12% of Gross Domestic Product, said Fayyaz.

Had the finance minister given half the time he spent begging the IMF to the textile sector, exports would have increased, he added.

The Aptma chairman claimed that the Federal Board of Revenue (FBR) has also blocked Rs100 billion sales tax refunds to inflate its revenues. The sector also sought a cut in electricity tariffs.



The chairman of Pakistan Readymade Garments Manufacturers Association said that the garment industry has become internationally uncompetitive due to high cost of doing business.

He said the industry did not need concessionary loans, but the government should release all pending refunds.

Published in The Express Tribune, June 6^th, 2017.

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