ACCORDING to the caretaker federal minister for commerce, more than 1,600 textile factories have shut down in the country in the last 16 months. In my opinion, most factories are working below their production capacity due to high energy cost, two-day weekly closure of gas supply, and low gas pressure when it is ‘available’.

These are the basic raw materials for the production of exportable textile goods to international buyers. Textile exporters are also trapped in the sales tax refund system, which is causing financial crunch, and making it impossible for them to deliver their export orders in time.

The textile sector is the backbone of the national economy. It is a valuable foreign exchange earning engine, generating employment in the country, and giving impetus to the economy.

The state machinery should spend its energy to boost textile exports for earning valuable foreign exchange and continue moving the wheels of economy. However, the present government’s policies are not producing fruitful results for the textile sector. Our textile exports are continuously declining.

The government should chalk out a comprehensive five-year plan for reviving textile growth in consultation with stakeholders who should be provided utilities at competitive rates. The government should ensure uninterrupted gas supply to the textile sector to reduce costs and create self-sustainability in energy terms. The government should also provide loans for installing solar power-generation systems, and should ensure efficient and speedy refund of the pending sales tax amounts as per the relevant rules.

The government should also restore zero-rated status for the designated five export-oriented sectors. The restoration of the status will spare the government to keep its focus on expanding the tax net, and collecting more taxes for the national exchequer.

Yahqub Lodhi
Secretary, Towel Manufacturers Association of Pakistan
Karachi

Published in Dawn, November 1st, 2023