June 26, 2008	Thursday	Jamadi-us-Sani 21, 1429

LAHORE, June 25: The federal government is believed to be trying to work out a new formula for disbursement of Research & Development (R&D) support to the value-added apparel and textile exporters.

“The new formula will plug leakages and prevent misuse of subsidy by some unscrupulous exporters,” a textile ministry official who declined to be identified told Dawn on Wednesday.

Though the government had not announced continuation of the subsidy in the budget for the next year, the official said, it would continue the support over the next year as well in order to help the apparel and home textile exporters reduce their cost of doing business and stay competitive in the global textile markets.

The domestic textile industry is reeling under the increasing cost of doing business on account of high energy and credit prices and is demanding continuation of the cash R&D subsidy in order to stay competitive in the world markets.

The apparel exporters say the R&D support being given to them had boosted efforts to add value to textile exports from the country as indicated by the rising unit prices.

The textile ministry official said the government was mulling over a proposal to calculate national average price of export items and link the maximum rate of the R&D support with it.

So far the exporters had been drawing cash subsidy on the basis of their declared unit price. Some exporters would inflate the selling price of an item to $14 per piece.

Others would claim it for $6 per piece for the same item. So exporters of the same items would get different amount of subsidy on the basis of the