LAHORE: Textile minister Abbas Khan Afridi will meet Finance Minister Ishaq Dar on Thursday (today) to discuss removal of snags in the approval of the second five-year textile policy (2014-19).

The textile industry leaders already dismayed by the inordinate delay in the approval of the policy drafted eight months ago are not much hopeful about the outcome of the meeting.

Many say the government is delaying implementation of the policy because of its fiscal problems. “Since the implementation of the policy will require the cash-strapped government to immediately settle outstanding export refund claims of Rs22bn, it is trying to delay its implementation on one pretext or the other,” a garments exporter said.

The Rs88 billion draft textile policy promises settlement of outstanding refund claims of exporters, procedural improvements in refund regime, drawback of the local taxes on 10pc increase in annual exports, establishment of an Exim bank, duty free import of machinery and subsidised export refinance.

The government had announced these measures in the budget for the present fiscal. But none of these has so far been implemented because of the delay in the approval of the new textile policy, targeting to double the textile exports to $26bn in five years.

Pakistan Readymade Garment Manufacturers and Exporters Association (PRGMEA) chairman Ijaz Khokhar told Dawn the government was ‘unnecessarily delaying the approval and implementation of the new policy’. “Instead of presenting it before the Economic Coordination Committee (ECC) for its approval, the draft has been handed to the Planning Commission of Pakistan to suggest changes like proposing allocations of the funds for different sectors of the textile industry. Such changes will only defeat the purpose of the policy. It is for the first time in the history that the commission is being involved in the finalisation of the policy – just to delay its announcement,” he said.

Pakistan Textile Exporters Association (PTEA) chairman Sohail Pasha said the undue delay in the implementation of policy was ‘engendering serious apprehensions and causing uncertainty in the industry’. “The textile policy is being awaited because the different incentives it carries would help the exporters compete in the world markets and boost their exports. The textile exports have dropped by 6.38pc in December from a year earlier and we have not been able to take full advantage of the GSP-Plus facility from the European Union. If we had implemented the policy six months earlier, we would have been in a much better situation today,” he said.

PTEA group leader Ahmad Kamal was of the view that the country had failed to take full advantage of the trade concessions given by the EU owing to the lack of government support to the exporters.

“The previous Rs188bn textile policy (2009-14) had failed to meet the target of increasing exports to $25bn because it was not implemented honestly. The government had released only 15pc of the total funds announced in that policy and around Rs22bn of textile exporters are still outstanding in various incentive schemes under that policy.”

All Pakistan Textile Mills Association (Aptma) chairman S M Tanveer said the delay in the approval of the policy reflected a lack of interest on government’s part to promote and protect the country’s largest industry and export revenue earner. He said both India and Bangladesh had announced their textile policies and registered growth of 94pc and 160pc in exports in last five years, respectively, against 22pc by Pakistan during 2009-14. The global textile trade had also risen by 45pc, he said.

He said 30pc of the industry capacity was non-operational, exports stagnant and no new investment taking place since 2006-07. “If the economy is to be turned around and jobs created the government will have to focus on the growth of textile industry.”

Published in Dawn, January 29th, 2015

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