Creation of separate EDF for textile sector: National Assembly body asks Textile Ministry to take steps

The National Assembly Standing Committee on Textile directed the Textile Ministry to take steps for establishing separate Export Development Fund (EDF) for boosting country's textile exports. The committee, which met here with Haji Muhammad Akram Ansari in the chair, also directed the ministry to take measures for release of Rs 23 billion refunds to the textile exporters.
The committee was informed that textile sector alone earn $12 billion foreign exchange last year and made good contribution in the EDF, but regretted that 40 percent of its own contribution was not spent for promotion of textile sector. As the government created separate ministry for textile sector, similarly the EDF should also be separated from ministry of commerce so that it could be utilised for the promotion of the important sector.
Representatives from different textile sector associations were of the view that up till now about Rs 23 billion was accumulated in the EDF, but the fund was usually spent on political basis without any standard criteria. They also demanded of the government to make special board for EDF in ministry of textile having representatives from all textile related associations. They requested the committee that some percentage of EDF should be utilised for facilitation of textile exporters.
Abrar Aalam from EDF told the committee there are set criteria for spending the funds collected from exports of all commodities including textile. According to EDF Act 1999, the funds generated can be used in the prescribed 12 categories. There Board of EDF, comprising representatives from all stakeholders including textile sector.
Representatives from different textile associations informed the committee that the EDF Board rejected the proposal for purchasing the Affluent Plant, which is a pre-requisite 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 establish its own EDF, then it will be easy to meet such requirements of foreign countries.
Haji Muhammad Akram Ansari directed the ministry of textile to take steps for creation of separate EDF. Secretary ministry of textile Shahid Rashid informed the committee that less than 20 percent releases were made to textile sector from the funds and it was essential that the ministry has its own EDF instead of contributing in the ministry of commerce funds. The secretary also informed the committee that Textile Draft Law was prepared and soon it would be presented in the parliament for approval.
About Duty Drawback and R&D facility, the secretary informed the committee that the ministry received Rs 7.5 billion and it would be distributed among the exporters. However, mechanism would be worked out in this regard with the stakeholders. He also said that duty drawback facility was only for two years and till September 2010 all claims were cleared.
One representative informed the committee that the textile exports have been reduced to Rs 500 million from Rs 2 billion due to higher inflation, higher value of US dollar against Pak rupees, un-competitiveness in international market and higher fuel costs. Regarding energy supply to the textile city the Sui-Southern Gas Company (SSGC) representative assured the Committee that gas would be supplied to the textile city till February, 2011.