KARACHI, Aug 20: An unending and perpetual mistrust, that almost borders on adversarial relationship, inhibits 174 textile mills from providing elementary information of their monthly cotton consumption and yarn production. It has led to a controversy between the official agencies and the All Pakistan Textile Mills Association (Aptma) on quantity of carry-over cotton stock as the current season comes to an end this month.

The Aptma estimates the carry over cotton stock by end August somewhere between 0.8 to 1.00 million bales as against 3 million bales—plus minus—by the official agency—Textile Commissioner’s office.

“It is a difference of about two million bales, and when translated into hard cash comes to Rs20 billion plus,” a cotton market watcher remarked. “Either of the two parties—textile mills or the official agencies are seriously wrong somewhere,” he made it clear and attributed this discrepancy to the mistrust between the government and the business groups.

There is an inherent fear in the business that the information they would share with government would be used against them. The government, as a matter of habit and decades long orientation considers business cheats and compulsive liars.

The Aptma questions the credibility of the Textile Commissioner’s data on cotton consumption and yarn production. “We have informed government that about 80 textile mills with about 425 thousand spindles are not our members,” Nadeem Maqbool Chairman of Aptma informed Dawn on Tuesday. These 80 mills are using the spindles bought from big textile groups. The big textile groups invested substantial amount in last three years and replaced the worn out and old spindles. These were sold to about 80 odd mills which are not reporting at all.

“Why is the price of cotton shooting up to Rs 2,200 a maund plus when there is a stock of three million bales with the textile mills,” Nadeem Maqbool raised a pertinent question. Obviously mills have hardly one month consumption stock and wants to build up inventory for next month.

Aptma estimates an average consumption of 0.8 to 1 million bales of cotton every month while official agency put it anywhere from 0.6 to 0.7 million bales. The Textile Commissioner’s office, as a matter of ritual, collect data of cotton and artificial fibre consumption from 445 textile mills every month. Its latest report—May 2002— says that out of 445 mills 180 have supplied data, 174 did not and 91 are closed.

An assumptive data for the 174 defaulting textile mills has been applied using the information received from 180 textile mills which convinces the official agencies that inventory of cotton stock is much higher than being quantified by the Aptma.

Officials complain that out of 174 defaulting textile mills, at least 80 are found to be most chronic. Many of these chronic defaulters are not providing information for the last three and four years.

Those who are not ready to share information of cotton consumption and yarn production include mighty big names. One of them is the biggest textile business group in the country that reportedly owns more than 300,000 spindles, rotors in hundreds if not in thousands,

cloth factories, readymade garment units, a privatized bank, cement and is one of the most active player in privatization game.

Then there is a textile mill owned by a powerful political family who occupied the highest office in the country and dismissed an elected government in the country. This family owns one of the most modern farm and a textile mills with about 40,000 spindles. There are many other equally influential textile groups, which would obviously not conceal their production to save on their taxes.

Textile Commissioner was once armed with highly discretionary administrative powers. He used to get accurate information well within stipulated time from all the textile mills till late eighties. But once deprived of tooth and nails and reduced virtually to a backroom office of the Industries Ministry, the textile mill owners have started taking liberties and are defaulting on giving data.

The Textile Commissioner is now approaching Central Board of Revenue and the banks to obtain information on collection of sales tax from textile units and allocation of credits to the textile mills. The agency wants to use this information to monitor the cotton consumption and yarn production.

Officials say that business groups are bound to reply back to the official agencies under the Industrial Statistical Act 1942. This act provides penalty on the defaulters. “A defaulting textile unit opted to pay Rs42,000 fine rather than giving information,” an official disclosed.