Pakistan's textile sector rejects ‘unrealistic’ Budget 2020-21

Cautions liquidity crunch will lead to decline in exports, unemployment

Imran Rana June 16, 2020
A Reuters file image.

FAISALABAD: The condition of the textile industry will worsen amid a liquidity crunch and shrinking global business, and will lead to closure of industrial units, decline in exports and massive unemployment.

Pakistan Hosiery Manufacturers Association (PHMA) Chairman Salamat Ali, in a statement, said the value-added textile export industry had rejected the federal budget for 2020-21, terming it “one-sided and unrealistic” without any relief for the textile industry, which was the backbone of the economy and exports.

Being the most labour-intensive, the textile industry provides employment to a huge number of female workers, particularly to the lower class, in garment units.

The association was of the view that the textile industry had been completely ignored and deprived of relief in the federal budget, which purportedly had been made on directives of the International Monetary Fund (IMF).

It said the imposition of 17% sales tax in the previous budget had brought a disastrous impact on the textile industry and its exports as well as caused liquidity crunch due to stuck refunds worth billions of rupees. “The demand for restoring the zero-rating facility and proposals of the textile export sector have been disregarded,” it said.

Value-added textile exporters have expressed sheer disappointment and have demanded that the government review and restore the zero-rated regime for the five major export sectors as a lifeline for the economy.

The exporters urged the government to reconsider restoring the zero-rating facility or slash general sales tax from 17% to 4%, said Ali in the post-budget statement. The PHMA chairman was of the view that the government ignored the global business shrinkage and the challenges faced by the local textile Industry.


Published in The Express Tribune, June 16th, 2020.

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