Textile sector voiced their discontent with the textile budget 2018-19. Stakeholders are concerned about export oriented sectors of textile as the budget is not as per their expectations. The budget should have been prepared focusing on the scenario of the declining textile exports that are constantly falling. Several amendments in the budget would be required by the National Assembly to improve growth rate of textile.
By the start of April, in the budgetary proposal, APTMA had emphasized on relevant measures that can help achieve sustainable growth. APTMA suggested that the government should focus on a tripartite strategy which included availability of electricity and gas at affordable cost of Rs.7/Kwh and Rs.600/MMBtu from Rs.11.40/kwh and Rs.1300/MMBtu respectively, since it plays an important role in reducing cost of doing business. It was further suggested to remove custom duty for the local manufacturers to be able to import coal to generate energy. It was also indicated that FBR needs to systemize an upfront automated payment by allocating funds in the budget for the State Bank of Pakistan for duty drawback as well as refund of sales tax and income tax to resolve liquidity crisis of manufacturers. Also, the Long-Term Financing Facility (LTFF) should be available to indirect export manufacturers as well to encourage the value- chain for producing Textile goods meant for export.
The State Minister Mr. Akram Ansari termed the 2018-19 budget people friendly; but the textile stakeholders have expressed disappointment with the budget unveiling.
Mr. Ijaz Khokhar, chief coordinator Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) said, “We are exporters and nothing was announced for exports. Only the previously announced Rs.180 billion Prime Minister’s package was mentioned again and again, there was no direct relief for the textile sector and exporters.” He also added that the exporters had no idea when they would be given their previous refunds.
Mr. Jawed Bilwani, leader of Pakistan Apparel Sector stressed that the government should release long withheld refunds of approximately Rs.200 billion for a major breakthrough and unsurpassed exports, otherwise, the situation is already heading towards alarming scenario. He also mentioned that the trade deficit had reached approximately USD 33 billion, the highest in the 70-year history of the country. “They should have done something for exports. They did not utter a word for an increase in the exports,” Bilwani said.
Textiles industrialists are concerned that Textiles were kept among the zero rated sectors but it should have been done through legislation. They also fear, in case of shortfall, sales tax will again be collected from the textile sector.
Mr. Gohar Ejaz, Senior APTMA group leader expressing his dismay over the budget said, “It is a disappointing budget for the textile industry. The government has neither announced any policy measures on energy pricing nor has it continued the export package. How is the government planning to meet the current account deficit when it has discontinued the current policy, which resulted in a 10 percent growth last year after four years of continuous fall?”
Pakistan’s share in global exports has fallen to 0.13 percent hence; exports should have been a primary focus of the budget. Proper implementation of the budget and incentives can be very beneficial but the resources are hardly utilized to their full potential.
Although major dissatisfaction was expressed by industry but some positive steps were taken to facilitate trade and industry like reduction in tax slabs, restriction in power of tax collectors regressing back to Federal government, reduced custom duties on certain items, rationalization and reduction of tax rates for individuals, AOPs and companies, removal of regulatory duty on important raw materials, increase in development budget, allocations for agriculture cotton sectors, continuation of LTFF and Export Refinance Facility at lower rates for textile sector is appreciabl
