KARACHI, March 19: In all likelihood, the textile industry leaders have lost hopes of getting a second incentive and concessions package before next budget in June and there are fears of closures and default on payment of bank loans, long-term financing of Rs35 billion plus as well as on short-term cotton financing estimated at over Rs300 billion.

“Now that the government has got involved itself in more pressing and disturbing political problems, the revival of textile industry is too low on its priority,” disclosed a senior textile leader from Lahore who does not want to be identified.

He disclosed that a number of “weak textile mills” were resorting to partial closure but fear to make it public as it would damage their business connections in the market.

Textile leaders complain of their exports being unable to pick up and foreign textile products pushing out Pakistan textiles from the market, which is putting the industry into a crisis like situation.

The textile industry got a concession and incentive package of Rs25 billion to Rs30 billion in August 2006 after the government offered duty drawback facility from 3 to 6 per cent on different textile products, brought down lending rate on export refinance and swapped outstanding long-term loans with those being offered to export-oriented units at relatively low interest rates.

This package was found to be “too little and too late” as Pakistan’s textile exports in first half of 2006-07 was found to be sluggish, the textile industry came out with fresh demand on the government to “give more.”

In December 2006, the prime minister constituted a National Textile Strategy Committee. A sub-committee of this committee headed by Tariq Saeed Saigol drew up a new package of concessions and incentives that was estimated to cost exchequer about Rs30 billion.

From this package of about Rs30 billion proposed by the sub-committee, the federal textile ministry agreed to extend support to the recommendations that if agreed upon by the government would cost Rs20 billion. This is mainly the abolition for two years 41 taxes, levies and duties being levied by the federal, provincial and local government.

A government committee, headed by the prime minister’s adviser on finance with the chairman Central Board of Revenue and the federal textile minister as members, is carrying out an exercise and analysis of these recommendations for last several weeks without reaching any consensus or agreement.

The government has fixed an export target of $11.5 billion for cotton and textiles in the current fiscal year. The exports are, however, lagging behind the target and the downstream sectors — garments and bed sheets — appear to be badly hit.

“While the export is on decline, the government does not have enough capacity to timely monitor the outward flow of goods from Pakistan and carry out a quick analysis,” complained a local leader of All Pakistan Textile Mills Association.

The data and information on exports is being gathered by the private sector arm of Pakistan Revenue Automation Limited (PRAL), which then passes on these figures to the Federal Bureau of Statistics.

The bureau releases the aggregate data of the preceding month at the end of month and detailed item-wise figures after about more than a month’s lapse. The Trade Development Authority of Pakistan (TDAP) manages to give a market survey of exports with a time lag of six months.

Even this delayed data and information on exports is inaccurate and on occasions has created more confusion. For more than five years, the government has been announcing a restructuring of the FBS to improve gathering of information, data and figures on economic activities. Nothing has happened as according to a businessman, “What the government fears most is an independent and well-equipped data and information gathering agency.”