Textile Policy 2009-14 : MinTex achieved only 22% of textile sector uplift target in 3 years
Ministry of Finance, Planning Commission not releasing funds
November 20, 2012
By Razi Syed
KARACHI: The Ministry of Textile (MinTex) could only manage to achieve 22 percent of its targets for the development of textile sector in the country during the last three years.
The implementation of the Textile Policy 2009-14 was facing shortage of funds and against a total allocation of Rs 123 billion, Ministry of Finance (MoF) has only released Rs 24 billion (20 percent) of the allocation for textile exports initiatives.
Sources in the MinTex said on Monday that the ministry wrote many letters to the MoF but it could not reply positively.
Due to paucity of funds for textile policy implementation, many of the key policy initiatives were not launched, which caused resentment among the textile industry members.
The textile exporters said Planning Commission (PC) also stopped the funding of Rs 6 billion for the MinTex more than two-and-a-half-year ago.
It is matter of surprise for the textile sector of the country that allocation of Rs 2.8 billion out of a total of Rs 13 billion collected for Export Development Fund (EDF) from textile sector being managed by Ministry of Commerce was also not being released.
Major projects worth more than Rs 6 billion were pending with PC for the last two-and-a-half-year.
This delay is causing liabilities under operationalised schemes besides hampering execution of many projects and their timely completion.
The industry is facing problems due to non-availability of utilities including gas for production due to which it is unable to meet domestic demand, consume domestic cotton and fulfil export orders, said Pakistan Yarn Merchants Association senior member Ghulam Rabbani.
The textile sector is confronting marketing and market access issues including absence of level-playing field for textile sector in trade with India.
Under composite duty structure applicable in India, 75 percent duty is charged on a Pakistan shirt and in Pakistan there is only 25 percent duty on Indian shirts imports.
According to Textile Policy 2009-14, textile industry is exempted from load shedding and accorded the same priority for gas as given to the fertilizer industry.
Meanwhile, Strategic Trade Policy Framework 2009-12 has also failed to ensure sustained growth in exports during the last three years, total exports were recorded at $67.75 billion as compared with imports of $119.49 billion, leaving a trade deficit of $51.49 billion.
The reasons behind the less than projected growth in exports were non-implementation of the trade policy initiatives that were announced in three yearly framework and due to the non-release of required funding from the MoF.
Gas and power shortages resulted in closure of many industrial units for months as well as running less than their full capacity for creating exportable surpluses. Slow value addition and non-diversification of Pakistan’s exports base was known as other main reason in slow growth in the said three years. Exports of textile group amounted to $36.365 billion during 2009-12, including $10.221 billion in 2009-10, $13.788 billion 2010-11 and $12.356 billion in 2011-12.
Exports of textile group :
2009-10 $10.221 billion
2010-11 $13.788 billion
2011-12 $12.356 billion
Total $36.365 billion
Courtesy: Daily Times