The textile industry of Pakistan has been for the past few years largely confronted with major challenges like energy crisis, dearth of value addition and branding, unskilled manpower, outdated textile machinery and overburdening of debts.
Keeping the view to the numerous problems being encountered by the textile industry, the previous PPP government announced the first ever five-year Textile Policy (2009-14) envisaging textile export target of $25 billion from $9.611 billion in 2008-09 and setting comprehensive measure to enhance textile production.
Seemingly, ambitious export target was fixed without giving due thought to the country’s historical performance, sluggish global and domestic business environment and threats from other competing nations as according to sources total textile exports reached no more than $14 billion mainly because the key initiatives of the policy are yet to be implemented.
The textile policy (2009-14) has rendered to be futile because the government discharged only Rs26.75 billion as against the commitment of Rs188 billion, including cash subsidy of Rs87 billion. Due to inadequate funds many schemes under the textile policy including Textile Investment Support Fund, drawback of local taxes and levies, refund of past R&D claims are in doldrums. Moreover, Technology Up-gradation Support Order 2010 was initiated to offer incentives to textile machinery and technology, but is yet to be implemented.
According to APTMA member, even after a passage of about more than four years of the policy, the amount trapped at the FBR for refund because of imposition of sales tax at 5 percent has risen to $65 million thus the exporters are facing critical liquidity crunch. Moreover, SROs including only 30 percent of the stated schemes have been issued while the remaining is yet to be issued.
Furthermore, the textile policy also guaranteed to dispense regular supply of gas and power to the textile industry. However, it has failed to provide this as one million spindles have shut operations due to increase in electricity load shedding from 8 to 10 hours, resulting in huge loss to the industry.
Nevertheless, one initiative that has been implemented at the culmination of the textile policy is the Rs179 million funds released last year for Multan cotton ginning institute, and now this month construction work has begun on ginning research institute in Multan to undertake research in improved ginning methods.
The government should be concentrating upon some truly visionary steps in the new textile policy (2014-19) and not just limiting themselves to utilizing monetary dole-outs as solutions necessary to achieve export target of $26 billion by 2019.