JOINT EFFORTS TO RESOLVE TEXTILE PROBLEMS
By AMANULLAH BASHAR
June 03 - 09, 2002
Leaders of the textile industry, representing all top organizations and textile groups have decided to join hands to get resolve the problems faced by the textile industry. The move is focused to enhance production and promote exports of the textile products from Pakistan.
The decision to make collective efforts was taken at a high-level meeting attended by representatives of different bodies and prominent textile groups including Nadeem Maqbool, Chairman All Pakistan Textile Mills Association (APTMA), Wajid Jawad, Chairman, Council of Textile Association (CTA), besides Chairman of All Ancillary Textile Associations. Those who attended the meeting have unanimously resolved to formulate a joint strategy for solving the problems of the Textile Industry and for promoting its production and exports.
The participants agreed to jointly represent before the government the major problems faced by the industry for their expeditious resolution.
The textile entrepreneurs expressed grave concern over what they described the deteriorating law and order situation in the country and the growing tension at the Indo-Pak border and assured the government of Industry's complete support in the hour of need.
They impressed upon the government to redress the major problems of the textile industry failing which the industry would not be able to sustain itself against ever-increasing global competition.
Following areas and major problems were identified in the meeting, which call for urgent attention of the government to address them on priority basis.
SALES TAX REFUND
Inordinate delay in refund of Sales Tax on zero-rated exports was unanimously identified as the single most important problem retarding the growth of the Textile industry and its exports. It was further resolved to request the government to reduce the rate of GST to 5 per cent. The members urged the government to ensure that all sales tax refund claims filed up to June 15, 2002 are positively released before June 30, 2002.
CONTAMINATION FREE COTTON
The textile industrialists were of the common view that unless contamination free cotton is made available, value-added textile cannot be produced and exported. The members decided to support all efforts of the government for production of 100 per cent contamination free cotton as is available in other cotton producing countries.
Cost of electricity and gas is a major cost in the textile industry. In spite of the rates of utilities in Pakistan being higher than competing countries, their tariffs are increased on regular basis making the industry un-competitive. The industrialists urged the government to contain the tariff rates of utilities by controlling the exorbitant line losses and rampant corruption in public utility companies.
The members decided to represent to the government for increase in the rates of the duty drawback on blended fabrics and apparels.
It may be noted that the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has expressed concern over the reports that the CBR is intended to cut duty drawback rates in the next federal budget.
PRGMEA while recalling the government's realization recently that the textile exporters had suffered huge losses due to widespread recession especially the US market as a result of Sept.11 events. Another adverse impact, the exporters had to suffer, was the depreciation of the dollar against rupee which also caused severe impact on the exporters. Consequently, the State Bank of Pakistan reduced export re-finance rate twice and the ministry of commerce announced suspension of two installment of phased cut in duty drawback rates. The Export Promotion Bureau (EPB) had also announced special subsidy for exporters to participate in fairs abroad to meet their buyers because buyer had stopped visiting Pakistan due to law and order problems.
It is amazing that on one hand the government is facilitating the exporters while on the other hand the CBR remains unmoved of all these friendly and conducive attitude of the government. This indicates lack of coordination within the government organizations and the good decisions of the government. It is also against the spirit of the government policy to bring good governance to elevate the social and economic order of the country. Besides ensuring the implementation of the government policies in letter and spirit, an effective follow up of the decisions is equally important if we have to achieve the target of the good governance specially in the corporate sector.
The textile industrialists were greatly concerned over the adverse publicity inflicted on the country's image as a consequence of the events of 11 September 2001 and the recent terrorist attacks within the country. Undue war risk surcharge has been levied by all foreign shipping lines on consignments from and to Pakistan and fewer airlines are touching Pakistan airports due to which freight cost of exports has considerably increased. They urged the government to formulate and earnestly implement business friendly and export facilitating policies.