June 29, 2007	Friday	Jamadi-us-Sani 13, 1428

ISLAMABAD, June 28: The government on Thursday approved another hefty support package of Rs20 billion for the textile industry to help the industry accelerate export of billion of dollars in the year 2007-08, says Textile Minister Mushtaq Ali Cheema.

The package has been approved in the Economic Coordinating Committee (ECC) meeting headed by Prime Minister Shaukat Aziz.

Another summary of the commerce ministry regarding six per cent R&D on leather garments has been deferred by the ECC with an advice to determine the impact of the subsidy on leather garment exports.

However, the ECC has given stern warning to all the ministries, including textile to avoid submission of any summary in future seeking subsidy under the head of research and development.

Talking to Dawn after the meeting the textile minister said the support package would even go beyond this figure to around Rs30 billion after including the measures taken in the budget 2007-08. He said the relief was in the shape of flat rate of income tax and allowing of subsidy to locally-produced polyester staple fibre (PSF).

Under the package, Mr Cheema said government allowed six per cent R&D support for garment sector, five per cent on dyed printed home textile and three per cent on white home textile and dyed printed fabrics.

This package of subsidy will continue till June 2008, the minister said. Earlier, it was scheduled to reduce the rate of subsidy from July 1, 2007. However, due to the intervention of the textile ministry the rate of subsidy will remain unchanged.

The minister said that it had also been decided that mark up at the rate of three per cent would be given to the spinning sector on their long- term loans, irrespective of the rates on which they got the loans. He said an amount of more than Rs1 billion had been allocated for this scheme.

Mr Cheema said that an amount of Rs2 billion had been allocated for giving 3.5 per cent R&D on locally produced PSF from July 1, 2007 to June 30, 2008.

To a question he said that the flat rate of one per cent subsidy would give more benefits to the low value-added sectors like yarn, grey fabrics, and cotton etc.

Two more countries — Vietnam and Cambodia — were included in the list of export destinations for the purpose of availing the facility.

An official announcement issued here said that the R&D assistance would continue for the textile sector to enhance the research and development activities.

He said the R&D subsidy was withdrawn in the budget but on the demand of the textile sector and Pakistan Textile Association (Apta), the prime minister considered their grievances and decided that the support would continue in view of the competition in the international market.

He said the textile ministry was working for the development of the textile sector for which promotion of the research activities were essential. He urged the textile sector to establish research and development cell in their factories for which the government would provide financial assistance at the rate of six per cent.