The five-year Textile Policy (2014-19) is going to expire today (Sunday) but it has failed to achieve all its targets including doubling value addition from $1 billion per million cotton bales to $2 billion per million cotton bales, increasing textile exports from $13.1 billion to $26 billion as well as creation of 3 million jobs in five years. This was confided to Business Recorder by the senior officials of Textile Division as well as industry stakeholders.
The Textile Division is planning to come up with a new policy comprising new targets, incentives and recommendations. All stakeholders would be taken on board before the finalisation of new policy, sources said. The textile policy (2014-19) goals included; doubling value-addition from $1 billion per million bales to $ 2 billion per million bales; doubling textiles exports from $13 billion per annum to $ 26 billion per annum; facilitating additional investment of $ 5 billion in machinery and technology; improving fibres mix in favour of non-cotton, ie, 14 percent to 30 percent; improving product mix especially in the garment sector from 28 percent to 45 percent; strengthening existing textile firms and establishing new ones; SME sector was the main focus of attention to enhance growth in value-added products through support and incentives schemes; schemes and initiatives for increasing usage of ICT; making the textiles sector domestically and internationally compliant, especially with respect to labour and environment rules and conventions; encouraging textiles units to use modern management practices for improving efficiency and reducing wastages; developing clusters systematically and strengthening existing clusters; vocational training of workers for capacity building; introduction of internships and different programmes for enhancement of skills and higher per capita productivity; facilitation for creation of 3 million new jobs; and adopting measures to increase ease of doing business and reducing cost of doing business.
However, none of the abovementioned targets were achieved due to lack of will, poor approach and financial crunch. The officials admitted that not a single target of the textile policy (2014-19) was achieved on account of financial crunch for different schemes under the policy as well as non-availability of energy at competitive prices.
Sources further said that the government released Rs 10 billion for the implementation of different schemes in the policy against the estimated finances of Rs 64 billion as announced by the then federal minister for textile industry Abbas Khan Afridi.
Drawbacks of Local Taxes and Levies (DLTL) were announced in the policy for exporters of textiles products on FoB (free on board) values of their enhanced exports on an incremental basis if increased beyond 10% over previous year's exports at different rates, ie, garments, 4 percent, made ups, 2 percent, and processed fabric, 1 percent. But instead of 10 percent increase, exports further declined during this period. Representatives of valued-added textile sector said that lack of ownership and unavailability of energy at competitive prices led the failure of the policy implementation. A standard of 10 percent increase was fixed for getting incentives announced in the policy. However with the already declining exports, it was of no use and no exporter was able to achieve the target, they added. All Pakistan Textile Mills Association (APTMA) representatives said that during the policy implementation period, energy cost was made almost double and resultantly over one hundred mills were closed, rendering thousands of people jobless. They further said that overall exports declined from $ 25 billion to $ 21 billion during this period, showing that textile policy had badly failed in contributing in exports promotion. The Textile Policy 2014-19 envisaged strategy to make textile sector competitive and sustainable, but it is evident from the exports figures that share of Pakistan's exports decreased, they added.
In a presentation by the Textile Division to Prime Minister Imran Khan, three pressing export impediments were identified, including pending liabilities of Rs 115 billion with the Federal Board of Revenue (FBR) and cost/ease of doing business.
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