Drawback regimes: Rs 25 billion working capital of textile exporters stuck

Nearly 25 billion rupees working capital of textile exporters stuck in various drawback regimes which is jeopardising the country's exports and adversely hitting the national economy, said Rana Arif Tauseef, Chairman Pakistan Textile Exporters Association while addressing the members of the association here Friday.
After the phase out of textile quota regime, exporters were allowed research and development facility to help boost exports. The facility was discontinued after two years in 2008, some refunds under this head were still pending and the exporter's capital funds were blocked creating difficulties in business flow, he said. Yet another scheme of drawback of local taxes and levies (DLTL) announced by the present government in 2009 in textile policy to facilitate textile exporters.
Exporters responded positively and the exports of the country jumped to USD 24 billion plus and of textile and of textiles USD 13 billion plus. However, the facility of promised drawback was partly honoured and only 14.67 percent of claims were paid, leaving the balance-claimed amount stuck up with the government, he stated. Thus additional funds of exporters were blocked in this scheme as well, he added.
On one hand, the working capital of exporters is getting stuck up in drawback regimes and on the other hand the cost of production was increasing day by day rendering our exports uncompetitive in the international market. Meanwhile, endorsing the recent press appeals of Aptma to allow the textile sector to operate on full capacity, Rana M. Mushtaq Khan, Chairman, Value Added Textile Forum & Central Chairman, PHMA and M. Jawed Bilwani, Chief Co-ordinator, Value Added Textile Forum & Chairman, Pakistan Apparel Forum lamented that textile industry especially the value-added textile export sector is the largest contributor of foreign exchange and export earnings generating the largest employment, it is on the verge of collapse due to severest ever load-shedding of electricity and gas and shortage of water.