Page 72 - July-August-2017

72

3. The approval process of establishment of 1,000 Syed Ali Ahsan said this seemed an election budget,
stitching units has been completed and its imple- as current year is the last year of government 5-year
mentation will start during FY 2017-18 and shall be tenure. He said the government is not serious in
completed in three years; increasing the GDP growth rate as it has not given
4. Textile Ministry will launch the first ever online textile any incentives to the industry without which their
business/trade portal for textiles using B2B (business dream of economic growth could not be materialized.
to business) and B2C (business to consumer) mode. Former chairman APTMA Gohar Ejaz appreciated the
This will bring Pakistan textiles’ value chain in line resolve of the government and hoped that the
with global marketing practices. industry will get incentives including uninterrupted
5. The import duty on nonwoven fabric (used in the power supply. He said affordability but not availability
pharmaceutical sector for manufacturing of band- of power is the real issue. He said hopefully the
ages, surgical gowns, wound dressings, etc.) was government will release sales tax refunds of the
proposed to be reduced from existing 16 per cent to industry by August 2017 as announced by Federal
5 per cent. Minister Ishaq Dar in the budget speech. He was
optimistic that the government will release tax
The minimum wage of labour is being increased from refunds in 90 days. APTMA leader Ali Pervez Malik
Rs 14,000 to Rs 15,000 per month. All the measures suggested that the government should have focused
announced in FY2016-17 like duty-free import of on solving the issues of current account deficit and
textile machinery will continue in FY2017-18. The trade deficit otherwise it is feared it has to go for
recap of key measures in the past is below another IMF program. The government should
ensure zero rating of all inputs in true spirit including
• The mark-up rate on Long Term Finance Facility packaging materials, spare parts and fuel and
has been gradually reduced from 11.4pc in June energy, he further opined. APTMA said, the govern-
2013 to 6pc for exporters and 5pc for textile sector. ment is not serious about implementing the Rs. 180
• Duty free import of textile machinery is allowed; billion Prime Minister's export led growth package as
• Uninterrupted supply of electricity and gas is the government has allocated only Rs. 4 billion next
ensured for the textile sector; year. It was further said that due to wrong govern-
• Technology Up-gradation Fund (TUF) Scheme ment policies, the country’s merchandise trade deficit
2016-19 for the textile sector has been introduced; has reached $31 billion -- the highest in the history of
• Prime Minister's package for exporters was Pakistan. The country’s exports, which was to the
The federal budget of Pakistan was proposed on beneficiary of the said package was assumed to be announced in January 2017 in which the centre-piece tune of $25 billion in 2013, has come down to $20
May 26, 2017 with a total outlay of the budget is Rs. the textile industry. Energy production was severely is the textile sector; billion in 2017. The cost of doing business has
5, 104 billion, with resource availability during depressed for more than 10 years due to chronic • The government made five export oriented sectors increased despite considerable decrease in oil
2017-18 estimated at Rs 4,714 billion. The develop- under-investment, inefficiencies in the power network - including textile, leather, sports goods, surgical prices, in the international market the price of electric-
goods and carpets - as part of zero-rated sales tax
ity has doubled. He said they were getting electricity
ment expenditure for next year will be Rs. 1,001 and an inability to collect sufficient revenue to cover regime last year. at Rs 6.76 Kwh where as in 2017 electricity stands at
billion, 40 percent higher than the Rs. 715 billion costs. It was also reinforced that by summer 2018, Rs. 11.30 Kwh. Payment of all pending refunds of
allocation last year. Since current government has nearly 10,000MW of electricity will be added to the Industry’s Response sales tax, which is more than Rs. 200 billion resulting
been in office, the economy has exhibited an overall national grid, eliminating load-shedding completing. The All Pakistan Textile Mills Association (APTMA) in creation of severe liquidity problem to the industry,
positive trend. The per capita income today stands at said that the budget 2017-18 has disappointed the duty drawbacks and incentive schemes claims
$1,629 as compared to $1,334, four years ago. The Budget for the Textile Sector textile industry as the government has not should also be made without any delay. The
inflation was on average 12% between 2008-13. In Pakistani Textile Manufacturing Sector contributes announced implementation of the proposals given by demands included to reduce the Turn Over Tax to
this current year inflation is expected to be around 8.50% of the national income. Cotton is the prime the industry. Chairman APTMA Punjab Syed Ali 0.25 per cent from existing 1 percent and to advise
4.3%. To some extent, the slump in international oil crop of Pakistan and makes the textile industry the Ahsan, former chairman APTMA Gohar Ejaz and Ali commercial banks to provide long term loans and
prices have contributed to this. The GDP Growth at most significant industry of the country. The textile Pervez Malik addressed a press conference, after working capital to the textile industry at
5.28% this year is the highest in the past decade. industry contributes more than 60% of the total announcement of the proposed budget. The textile competitive rates.
Four years’ ago, the economic growth was 3.68%. export earnings of the country. The sector constitutes industry had demanded following of the government.
The size of the economy has surpassed $300 billion. 46% of the total manufacturing and provides 38% of • To provide gas to the system at regionally competi- Though the government’s support is instrumental but
The industrial production grew by 5.02% and the manufacturing labour force. The new measures tive rate of Rs. 400/MMB sector also needs to adopt an innovative and radical
• To remove levy of GIDC and electricity rate for
businesses are now hiring additional workers. proposed in the FY 2017-18 begun on July 1, 2017 independent feeders and provide it at the rate of Rs. policy. Especially, to capture the losing share of
Exports during the first ten months of current year are: 7 KWH China in the apparel sector as the cost of production
have shown an overall minor decrease of 1.28% 1. To stabilise cotton prices in the country, a system • To release export refunds. in China becomes less competitive. Bangladesh (with
compared to 7.8% decline during the same period of cotton hedge trading for the domestic cotton will • To pay the remaining amount of Rs. 180 billion as advantage of being a least developed country, LDC,
last year. The government has associated this be initiated in consultation with stakeholders; per the Prime Minister's Export Led Growth Package status) and Vietnam have done extremely well in
reversal to timely support to exporters in shape of a 2. In consultation with public and private stakehold- according to which the government has to pay Rs 10 recent years to do so. In addition, the sector also
comprehensive package of Rs.180 billion in January ers, the government will launch Brand Development billion per month whereas only Rs. 2 billion has been need to seriously explore avenues in the nonwovens
2017 and commitment of the exporters. The major fund for textile sector; released so far during the last four months. and technical textiles.