ISLAMABAD: The government is likely to establish a separate Export Development Fund (EDF) for textile industry to boost the country's textile exports, sources said.

The textile sector earned about $12 billion foreign exchange last year and made good contribution to the EDF. However, even less than 20 percent of the contribution was spent on promotion of textile sector, sources in the Textile Ministry said.

Total Rs 13.1 billion has been provided to EDF since its establishment in 1992-93 to 2010-11. Of this, Rs. 3.8 billion had been sanctioned to the textile sector, sources added. The government is also considering to make a special board for EDF in the Ministry of Textile, which would consist of representatives from all textile related associations.

As the government allowed creation of separate ministry for textile sector, the EDF should also be separated from Ministry of Commerce so that it could be utilised for the promotion of this important sector, different representatives of textile industry told Business Recorder.

According to them, up till now about Rs 23 billion accumulated through the EDF, but the fund was usually spent on political basis without any standard criteria.

They said that EDF Board has rejected the proposal for purchasing the effluent plant, which is a prerequisite for meeting social responsibility by the foreign countries. If the government failed in installing the facility, the foreign countries might stop Pakistani exports, which will be great loss to the national exchequer. The representatives said if the Textile Ministry establishes its own EDF, then it will be easy to meet such requirements of foreign countries.