Energy tariff: Challenges faced by businesses to worsen if govt succumbs to IMF demands: APTPMA

FAISALABAD: Withdrawal of subsidy on energy tariff (gas and electricity) and disruption of supply chain of raw materials for export oriented textile industry would tend to adversely affect our national export drive whereas our export-oriented textile processing sector is already confronted with a host of problems which has increased cost of doing business, reduced productivity and rendered our products uncompetitive in the domestic and international export market and if our Government continues to succumb to the unreasonable harsh demands and conditions of IMF, the situation of dwindling industry and businesses would be worsen and resultantly flood of unemployment will deepen in the country.

These grave apprehensions were envisaged by Muhammad Pervez Lala, Chairman All Pakistan Textile Processing Mills Association (APTPMA), through a press statement issued by APTPMA Headquarter, Faisalabad.

The Chairman APTPMA reiterated that according to news circulating in the national press and media that Government of Pakistan is ready to fulfill IMF harsh conditions that subsidy on energy tariff being given to export oriented textile sectors may be withdrawn. The news has been created huge panic amongst the textile sectors. Elaborating, he said that the textile industrialists have been informed to their utter consternation and dismay, that the subsidy being given to export-oriented textile sectors, would be withdrawn in coming days. He said that in this situation they shall be constrained to close their units which are already running on low capacity due to increase of coal prices and other raw materials. This reverse swing of withdrawal of subsidy which is in gross contravention of recommendations and assurance which were given to the textile sectors by the Government is nothing short of breach of trust. Besides energy tariff, skyrocketing price of US dollar has increased dyes, chemicals, yarn and coal prices and other raw materials which have enhanced our cost of doing business massively.

Supply chain of raw materials is badly disturbed, banks are not supporting us to access our LCs which is increasing shortage of raw materials and reduced our productivity. He said that coal price has also been increased due to hike in dollar price, we import coal from South Africa and Indonesia and 5% duty has been imposed on its import which should be eliminated forthwith.

The Chairman APTPMA lamented, that the proposed decision of withdrawal of subsidy is being taken as a sequel to the recent meetings of IMF delegation with our Govt. The IMF’s continuous demands for enhancement in the tariffs of electricity, gas, POL and heavy taxation, has already jeopardized the textile export-oriented industrial sector and rendered their products uncompetitive in the domestic and international export market, and if the proposals of withdrawal of subsidy is implemented in totality, it might prove to be the last nail in the coffin of textile processing industry. He demanded of the Govt to refrain from such harsh decisions, if at all we intend to enhance our exports, economy and stay in business, concluded the APTPMA Chief.

Copyright Business Recorder, 2023