FAISALABAD: Textile exporters have welcomed the petroleum ministry recommendation to 50 percent reduction in gas infrastructure development surcharge saying that it will help cut the cost of production of exportable goods.
These were expressed by Rana Arif Touseef, chairman Pakistan Textile Exporters Association, while talking to newsmen.
Commenting on Ministry of Petroleum summery to the government for 50 percent cut in gas infrastructure development surcharge, he said that textile industry is the only hope for the revival of country’s economy which is currently jolted by the high cost of doing business. Textile industry has been facing strong competition at international markets from regional competitors where energy cost is lower and manufacturers are also enjoying special exemption.
High gas tariff in Pakistan have affected textile exports and left a bad impact on the value-added textiles sector, due to which textile exports have declined to USD 12.35 billion in fiscal 2011-12 against USD 13.78 billion in the same period last year. He said that energy shortage was the prime cause of decline in exports because 40 percent of production capacity of textile industry was dysfunctional due to short supply of gas.
Rana Arif said that textile sector was the backbone of our national economy that needs to be further strengthened by adopting investor-friendly policies and ensuring unremitting gas supply to export oriented industries. He urged the Government to provide smooth electricity and gas supply to the textile industry in the larger interest of the industry and textile exports as country has already missed the export target of USD 26 billion and hardly reach the mark of USD 23.64 billion at the end of FY2011-12, he maintained.
He was of the view that another reason for high production cost of textile is the ever increasing interest rate, double digit inflation and continuous devaluation of rupee. It is becoming unviable for the textile manufacturers to continue with their operations under the unbearable energy costs and continuous gas outages, he added.
PTEA chairman called upon the government to take serious steps to endure the textile industry and focus should also be on the value addition as textile sector need to enhance quality and production capabilities. Government needs to immediately address the key issue of energy shortage on priority basis to stop the negative growth in textile exports and improve the fragile foreign investment condition to put the country on the track of economic growth and development, he said. Pakistan exports mostly depend on textile and without resolving energy shortage, country’s export will not grow as targeted, he added.
Rana Arif said that trade and industry was passing through a rough patch while the coming months also don’t look encouraging for business activities as growing energy shortage and rising cost of doing business will dampen the productivity of manufacturers and industrialists.
He stressed that to achieve a better growth, government should rationalise utility tariffs, ensure uninterrupted power and gas supply to industry, bring down interest rate to single digit and improve law and order situation in the country so that economy could witness a turnaround.