Under this package, the government was supposed to pay Rs10 billion per month whereas only Rs2 billion has been released so far over the past five months. PHOTO: AFP
Pakistan Textile Exporters’ Association Chairman Ajmal Farooq, in a statement, denounced the government for failing to address the structural problems faced by the export sector of the country.
He was of the view that the budget 2017-18 provided little or no effective support for industrial progress, increasing exports, reducing the cost of production and enhancing the competitive edge of Pakistan’s goods in the international market.
He expressed disappointment over almost no allocation of funds for the incentives announced under the Prime Minister’s export-led growth package. Under this package, the government was supposed to pay Rs10 billion per month whereas only Rs2 billion has been released so far over the past five months.
“Tax rebates sanctioned for exporters have been delayed for the last couple of years with several exporters facing issues of cash flow and working capital management,” he added.
“Activation of idle capacities in the value-added textile sector has also been ignored and no funds are allocated for the revival of sick units, which could help in fetching an additional $1 billion and creating thousands of new jobs.”
In order to enhance Pakistan’s competitive edge in the international market, the textile industry has demanded subsidised energy supply to the export units at competitive rates of Rs400 per million British thermal units (mmbtu) for gas and Rs7 per unit for electricity, but no progress has been made on this front. The PTEA chairman was of the view that the most important objective of the budget should be boosting commerce and trade to enhance the country’s economic growth and increase quality production.
However, the budget seems to be an attempt at increasing short-term revenues without ensuring the sustainability and survival of existing manufacturing units, let alone help build new ones.
Already Pakistan’s exports have continued to decline for the past few years with a decrease of about $4 billion between 2014 and 2017. The government has blamed low international demand for commodities such as agricultural goods and textiles.
This has led to the demand shifting towards competitors such as Bangladesh, India and Vietnam, which have snatched Pakistan’s market share and increased textile exports.
Published in The Express Tribune, June 13th, 2017.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ