ISLAMABAD, Oct 27: Subsidies worth billions of rupees to the textile sector have not been able to enhance the pace of growth, as textile sector recorded a negligible growth rate of 0.53 per cent in the first quarter (July-September) of 2007-08 over the same period last year.
The slow pace of growth is the outcome of the two subsequent negative growths in textile exports — 0.79 per cent in September 2007, 5.55 per cent in August 2007 — excluding July 2007, where a marginal growth was recorded.
Official figures available with Dawn showed that the value of total textile exports reached $2.812 billion in the first quarter as against $2.797 billion in the corresponding period last year.
While the government paid Rs23.5 billion cash subsidies to the sector in a bid to help it build its capacity to compete with products of other textile producing countries — India, Bangladesh, China — all the money went in vain as average growth of textile sector during the last two years remained around four per cent.
Analysts suggested that government will have to revisit its policy of cash subsidy as it did not kick up export of various textile commodities.
They say ministries of finance, textile, and commerce will have to sit together with the leaders of the textile manufacturers to find out solutions to the dwindling exports various problems of the sector.
It is also evident from the government figures that expansion in the existing textile units or installation of new textile units has been missing in the last two years.
The statistics showed that import of textile machinery recorded a more than 40pc decline during the whole year of 2006-07.
The same trend was witnessed during the current fiscal year as textile machinery import dipped by 35 per cent in July-September period of the current fiscal year over the same period of last year.
Even the textile minister in an interview with Dawn recently admitted that textile tycoons have started making huge investment in other profitable sectors, like sugar, cement, power generation etc.
Analysts said that the government is violating rules as subsidies dolled out were never used for research and development in the textile sector during the last two-and-a-half years.
Export of readymade garments witnessed a negative growth of 2.86 per cent in July-September period of the current fiscal year over the same period last year.
A negative growth of 6.22 per cent in export of readymade garments was recorded in the month of September 2007 over the same month last year.
Statistics showed that export of bedwear also recorded a negative growth of 12.51 per cent in the first quarter of the current fiscal year over the last year.
There has been a decline of 5.81 per cent in export of bedwear in September 2007 over the corresponding month of last year.
The export of towels also dipped by 24.51pc in July-September over the same period last year.
A negative growth of 20.30pc in export of towels was recorded in September 2007 over last year.
The export of raw cotton, cotton yarn, cotton cloth, cotton carded and tents recorded a negative growth by 14.32 per cent, 4.73 per cent, 10.99 per cent, 59.20 per cent and 3.14 per cent, respectively, during July-September 2007-08 over the same months last year.