ISLAMABAD: After a delay of more than three months, the Ministry of Commerce implemented the cash support schemes from July 1, 2016 to arrest the dwindling trend in exports.

Announced on March 23, 2016, the Strategic Trade Policy Framework (STPF) 2015-18 set an annual export target of $35 billion.

Pakistan’s export proceeds have been sliding for the past few years. In 2012-13 exports were $24.5bn which dropped to $20.9bn in the outgoing fiscal year 2015-16.

Commenting on the delay in the implementation of STPF, commerce ministry’s focal person Muhammad Ashraf said, “The delay of three months in issuance of SROs was due to the vetting of the procedures by the relevant ministries.”

The framework was initially planned to be implemented with a total funding of Rs18bn over three years which has now been cut to two years ending in June 2018, according to the SROs. Ashraf, however, insisted on the three year policy period.

The cash support schemes announced through five SROs are tailored to support exporters of Gujranwala, Sialkot, Lahore, Faisalabad, Multan, Rawalpindi and Karachi.

The SME and other non-textile sectors of Balochistan and Khyber Pakhtunkhwa have been excluded from the purview of availing cash support schemes on product development, technology up-gradation and import of machinery for agro-processing. Balochistan exporters were also denied the facility of drawback of local taxes and levies.

No office of the State Bank of Pakistan was notified in the SROs of these schemes in Peshawar and Quetta.

There is one scheme where the SBP offices in Quetta and Peshawar were notified for receiving of claims of brand and certification development.

When the issue was pointed out, Mr Ashraf said the ministry has sought clarification from the SBP in this regard.

An exporter, seeking anonymity, told Dawn the trade policy was drafted for few cities of Punjab including the home constituency of commerce minister – Gujranwala.

He said the drawback scheme was also limited to products produced in certain cities. The policy, he said, is politically motivated.

According to the details, SRO578 was issued to provide cash incentives of 50 per cent matching grant up to a maximum of Rs5 million for specified plant and machinery to improve product design and encourage innovation in small and medium enterprises (SMEs) and export sectors.

A SME can avail this facility up to Rs5m per year while for non-SME the limit is Rs2m per annum. The scheme will be available in Gujranwala, Sialkot, Lahore, Faisalabad, Multan, Rawalpindi and Karachi

Through SRO579, matching grant will be provided to facilitate the branding and certification for faster growth of the SMEs and exports sectors through Intellectual Property Registration (including trade and service marks).

It will be available in Gujranwala, Sialkot, Lahore, Faisalabad, Multan, Rawalpindi, Karachi, Hyderabad, Sukkur, Quetta and Peshawar.

The commerce ministry notified through SRO580 the technology up-gradation scheme to increase the sophistication level of identified sectors including fans, home appliances, rice, cutlery and sports goods. Under this scheme, incentive in the shape of investment support up to a maximum of Rs1m per company for import of new plant and machinery will be provided.

The scheme will also provide a mark-up support of 50pc on up-gradation of technology for import of new machinery or plant subject to a maximum of Rs1m per annum per company.

Through SRO581, another scheme regarding the cash support for plant and machinery for agro processing was also notified to reduce the wastage of raw and semi-processed produce. Under the scheme, 100pc mark up support will be provided on the costs of imported new plant and machinery on all Pakistan bases.

Moreover, 50pc support on the cost of imported new plant and machinery will be provided for specified under-developed regions of the country – rural Sindh, KP, Fata, Balochistan, Southern Punjab and Gilgit-Baltistan.

The schemes under SRO580 and SRO581 are limited to Gujranwala, Sialkot, Lahore, Faisalabad, Multan, Rawalpindi and Karachi.

For cutting the cost of doing business and increasing the competitiveness of the value-added non-textile selected sectors, the ministry notified through SRO582 the scheme of drawback on local taxes and levies.

Under the scheme, drawback for local taxes and levies will be given to exporters on free on board (FOB) values of their enhanced exports if increased by 10pc and beyond (over last year’s exports) at the rate of 4pc on the increase.

The scheme will be applicable on the exports made during financial years—2015-16 and 2016-17. This scheme was made available to only exporters of Peshawar in additions to the mentioned seven cities.

Published in Dawn, July 3rd, 2016