Exporters' refunds: PTEA voices concern over undue delay in payment

Talking to newsmen here on Thursday, Ajmal Farooq, Chairman and Muhammad Naeem, Vice Chairman Pakistan Textile Exporters Association (PTEA) expressed grave concern over undue delay in payment of exporters' refunds. Textile exporters are badly deprived of liquidity and under such financial stress, achieving target to boost the exports appears to be a herculean task, they said.
Severe cash flow crunch is gradually eroding the biggest job providing textile export sector; consequently, sizeable textile capacity had been severely impaired and textile exports, both in quantity and value terms, had declined across the value chain. This is having adverse impact on the employment and the economy of the country. Terming funds blockage as main cause of continuous drop in exports, they said that textile industry is unable to tap its potential in accordance with capacity. Continuous decline in exports would spell some amount of trouble for the economy, especially considering that the trade deficit is continuing to widen.
Export industry is the life line of economy and any disruption would have devastating impact on the industry causing productivity loss, job losses and industrial unrest, they added. Finance is imperative to run the wheel of industry but without this, no one could even think to run industry. Government should set its priorities right and accord preferential treatment to boost the exports and generate industrial activities. They stressed the need to reform the tax system making it export and trade friendly.
PTEA Chairman Ajmal Farooq appreciated the Prime Minister's trade enhancement initiatives and stressed to ensure budget allocation for incentives in order to reap the benefits of the package. He said that due to short releases of funds, half of the incentives of Textile Policy (2009-14) are still yet to be disbursed. Government should speed up the process of paying out billions of rupees outstanding tax refunds to get maximum industrial growth and significant increase in exports.
He termed value added textile sector as the backbone of the economy with great potential for earning foreign exchange but around 54 percent of country's exports and 42 percent employment is heading towards disaster because of declining trend in the exports.
Regional competing countries are rapidly multiplying their exports just because of the edge they have on the cost of doing business. Pragmatic policies in consultation with stakeholders need to be formulated to reduce the cost of business by fixing rates of inputs in line with competing countries in the global market to create a level playing field, he suggested.
Pointing out the disparity with Punjab industries on gas prices, he said that textile industry in Punjab is using costly RLNG, whereas industries in other provinces are using system gas. He urged to supply gas to industries on equal prices across the board. PTEA urged the government to take stock of the situation and boost the exports of the country by restoring viability of textile industry through immediate release of stuck up refunds.