The Federal Secretary for Textile Industry, Shahid Rashid, said here on Tuesday that the present government is introducing a textile industry (development, promotion and standards) law for dealing with production and export of textiles, including ancillary industry to steer the textile sector in the right direction as it can be seen by the sustained growth in textile exports and to achieve the target of textile exports of $25 billion.
Addressing members of Multan Chamber of Commerce & Industry (MCCI), he said that the Ministry had released funds to the tune of Rs 1.61 billion against various textile policy support schemes, and the timely release of funds was proving helpful in supporting various textile initiatives.
The meeting was chaired by MCCI president Shahid Naseem Khokhar. The Secretary said that the textile ministry had previously released Rs 4825.00 million against various support schemes out of original allocation of Rs 7.5 billion. Moreover, a request has been sent to State Bank of Pakistan to immediately disburse the released funds. Instructions regarding the remaining amount of Rs 1.065 billion. out of total Rs 7.5 billion will be issued later on.
Shahid said: "Textile Ministry will keep on working sincerely for the sustained expansion and growth of textile sector. The government knows the importance of textile sector and all necessary steps would be taken in consultation with all stakeholders to protect and promote the industry."
He said that despite energy crisis and high interest rate, efforts are afoot to facilitate the textile industry in every possible manner. He said the government has disbursed 7.5 billion rupees in the current financial year to provide support to the textile industry. He further said that several steps have been taken for the revival of sick industries and as a result of these steps the growth rate of 100 large manufacturing industries has increased by 4.85 percent.
He said that a fund of 10 billion rupees has been established to protect the small and medium enterprises. The Secretary said that the Textiles Policy represents a new beginning for the textiles sector. Through this policy, the government has not only set out a development roadmap but has also provided necessary support without which accelerated progress of textiles in Pakistan was not possible. It is now the responsibility of the private entrepreneur and the business leaders, exporters, labour and all others affiliated with this industry to transform the policy vision into reality.
"The exports target of $25 billion is ambitious but not beyond our potential. It is essential that we depend on our own resources and neutralise the debt burden. Textiles offer a unique and realistic opportunity to strengthen our economy for its sustainable growth."
He said that Ministry of Textile Industry was taking various steps to improve efficiency of textile industry in all its spheres like management, productivity, quality and marketing, keeping in view the challenges of the free global trade regime. Special attention is being given to develop the areas of human resource, technology and infrastructure to boost the textile sector to achieve the objectives of gaining proper share in the international market.
The Secretary said that the government had issued 'Technology Upgradation Support' order 2010 to provide incentives to textile machinery and technology to attract investment in textile sector under new Textile Policy 2009-14, the government had kept a budget of Rs 1.6 billion in the current financial year for the scheme. This would be further increased to Rs 17 billion by 2014. According to him, the government will pick up 50 percent mark-up, subject to a maximum of 5 percentage points per annum, for projects exceeding investment of Rs 10 million in machinery or technology. Secondly, the federal government may provide grant up to 20 percent of the capital cost for new plant and machinery only as 'Investment Support' for projects with investment in machinery and technology not exceeding Rs 10 million. This support will be available to small and medium enterprises (SMEs) as defined under the State Bank of Pakistan (SBP) Prudential Regulations for SMEs. The repayment period shall not exceed ten years, including grace period, as may be allowed by the SBP. The investment support shall be provided to existing and new textile units registered with Ministry of Textile Industry.
According to the notification, mark-up support shall not be available to the borrowers with non-performing loans, classified under SBP Prudential Regulations. He made it clear that the facilities shall not be used, or availed, in duplication ie plant, machinery and equipment financed under SBP's LTFF Scheme and or any other support or concession of government of Pakistan shall not be eligible for the support under this Order. The registered units shall furnish data and any information related to the unit's operations, domestic sales, accounts and exports as and when required by the Ministry of Textile Industry.
The facility shall be administered by commercial banks and DFIs. It shall be the responsibility of commercial banks/DFIs to assess the viability of the projects and financing requirements. Machinery/equipment eligible under the scheme will include: (i) industrial stitching machines; (ii) garment dyeing machines; (iii) garment special effects machines; (iv) processing plants; (v) shuttleless looms; (vi) knitting machines; (vii) yarn dyeing; (viii) yarn singeing; (ix) open end machines; (x) ring machines for finer counts; (xi) ginning machines; (xii) power generation equipment for textiles and clothing units; (xiii) effluent treatment plants; (xiv) energy saving equipment; (xv) textiles testing equipment; (xvi) CAD/CAM/CIM system; (xvii) machinery for technical textiles/non woven; (xviii) quilting machinery and equipment; and (xix) fibre/filament manufacturing machinery.
Similarly, machinery attachments for value-addition include: (i) coarse filament yarn; (ii) compact spinning; (iii) spandex yarn; and (iv) slub yarn etc. Earlier in his address of welcome MCCI President Shahid Naseem Khokhar highlighted the problems faced by the textile industry.
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