Textile industry facing serious problems due to scarcity of funds

TAHIR AMIN

ISLAMABAD: Due to inadequate funds for textile policy implementation, some key policy initiatives have not been launched, which is not only causing resentment among the industry, following huge pending liabilities under operationalised schemes, but will also hamper projects’ execution and their timely completion.

A total of Rs 24.75 billion has been allocated against the approved financing plan of Rs 123 billion for 2009-12 i.e. around 20 percent only, while projects worth more than six billion rupees are pending in Planning Commission for the last two years, the Senate Standing Committee on Textile Industry was informed, which met with Senator Mushahid Ullah Khan in the chair here on Tuesday.

Briefing the committee, the Textile Ministry said that total PSDP allocation for Ministry of Textile Industry for current year was only Rs 150 million (0.05 percent of total PSDP). The industry is facing acute problems due to non-availability of utilities including gas for production due to which it is unable to meet domestic demand, consume domestic cotton and fulfil export orders. Availability of utilities and subsidies provided by competitor governments are putting textiles exports at a disadvantage in international market.

The committee was further informed that the industry is confronted with textiles marketing and market access issues including absence of level playing field for textile sector in trade with India-non-ad valorem duty on textiles, multiple tariff structures and subsidized exports.

The rules of Business of Ministry of Commerce stipulate: Textile Industry Division will be consulted on textile trade negotiations and also associated with textile sector trade promotion. Lack of coordination between Ministry of Commerce, TDAP and Ministry of Textile Industry for marketing, branding, export exhibitions and trade negotiations, are the marketing and market access issues confronted to textile industry.

The Ministry demanded that level playing field for textile sector vis-à-vis India should be ensured. As envisaged in the summary of Textile Policy 2009-14, textiles industry should be exempted from load-shedding and accorded the same priority for gas as given to the fertilizer industry.

The committee was informed that no budgetary provision in the federal budget for cotton research was made, while cotton production and research assigned to different divisions. Non-enactment of cotton related legislation (Plant breeders’ rights and amendment in Seed Act), delay in introduction of latest BT technology, weak implementation of cotton control Act, 1966, poor seed quality due to weak, regulation/infrastructure and inadequate extension services for cotton farmers are basic reasons behind low cotton production in the country as compared to other regional country.

The committee expressed serious concern over delay in introduction of BT cotton seed in the country, which is causing low production, and formulated a sub-committee to examine the actual situation behind the delay in introducing cotton in the country.

The committee was informed that Environment Ministry had opposed the introduction of BT cotton in the country on the base of environmental effects.

Textile Ministry informed that sufficient allocation in the federal budget for cotton research and technological up-gradation of sector, legislation on plant Breeders Rights and Seed Act, reform of regulatory framework and effective enforcement for quality assurance, financial allocation as per textile policy for its implementation, EDF contributions by the textile sector be managed by the Ministry of Textile Industry, enhancement of PSDP allocations for textile sector and close coordination between Ministry of Commerce, TDAP and Ministry of Textile Industry should be ensured to save the industry of the country which has eight percent share in national value added (GDP), 23 percent share in industrial value added (GDP), 57 percent share in total exports, 39 percent share in industrial employment while 41 percent share in banking credit (manufacturing).