ISLAMABAD, April 21: The government has approved a string of measures including the projected compensatory rebate of Rs8 billion for supporting the textile garment exports. Officials told Dawn on Thursday that the decision to this effect was taken in a meeting of the Economic Coordination Committee (ECC) of the cabinet held recently.
The commerce ministry had moved a summary to the ECC, seeking concessions for the textile industry, which was adversely hit by the elimination of quotas early this year. It also sought subsidies for textile producers competing against the producers of China and India in the international market.
According to the officials, all these measures would be announced in the upcoming budget for 2005-06.
The meeting decided to allow additional six per cent compensatory duty for the textile garment exports. It was also proposed to exempt textile garment exporting units from all cess for Employees Old-age Benefits Institution (EOBI), social security, welfare fund, etc., relaxation of restriction on working hours for women, declaration of selected garment factories as training institutions and certification of this manpower by the federal or provincial authorities.
The officials said the ECC had directed the labour ministry to review all these issues and came up with separate summary for consideration in the next meeting.
According to the officials, the ECC also decided that the selected garment factories would be declared as training institutions, with an arrangement that a testing and examining authority would be nominated both at provincial and federal levels to certify the manpower trained by such garment units.
The government had constituted a committee headed by the deputy chairman of the Planning Commission to work out measures to support the textile industry in view of challenges in the backdrop of quota elimination.
The committee suggested the government to set up a corporate entity managed by the private sector and funded by the Export Development Fund for providing designing consultancy, financial restructuring, market training/ advice and productivity enhancing expertise to the garment industry.
According to the officials, it was agreed that the textile sector had potential to increase exports and needed to be strengthened. India and China were already providing 13 per cent and 10 per cent subsidies, respectively, to their textile industries.
“The grant of compensatory rebate to the textile industry would not attract countervailing duties on our products,” added the officials.
