No incentive for textile sector in upcoming trade policy

Daily Times, Pakistan
By Nauman Tasleem

LAHORE: The government has offered no rebate or relaxation for the textile sector in the Trade Policy 2014-09 presented by Defence Minister Chaudhry Ahmed Mukhtar to Prime Minister, sources told daily Times Tuesday.

The government is planning to eliminate subsidies offered on different commodities and sectors including petrol, electricity, textile and fertiliser.

The sources said the government has already informed the textile sector that it would get nothing in terms of rebate or subsidy, as the textile sector has failed to cope with the changing world. The government, for the last five years, has been pressing the textile sector to invest in research and development but no textile miller has listened to the government, said the sources adding, “it forced the policymakers to take harsh decisions.”

The textile sector has also suffered due to an increase in gas tariffs, electricity prices and there would be no relaxation for the textile, as the government has refused to decrease the prices of both.

Currently, the government is giving Rs 407 billion subsidy including petroleum Rs 175 billion; electricity Rs 133 billion; wheat Rs 40 billion, and textiles and fertilizers Rs 48 billion. Due to agreements with different international financial institutions like International Monetary Fund (IMF) and World Bank (WB), the government is bound to withdraw subsidies, said the sources.

“Though the subsidies would not be ended in one go but it in phases and slabs,” the sources said adding that the subsidy on petroleum products is also causing problems for the government and the government is going to eliminate petroleum subsidy thus decreasing the trade deficit.

Government’s first priority is to control trade deficit, which is growing with passage of every day. “Trade deficit, caused by slowing down of exports and increasing imports have risen to an unprecedented level of over $20 billion,” the sources said.

The government is planning to establish industrial estates with relevant infrastructure facilities. An allocation of Rs 1 billion would be made for establishment of Export Processing Zones (EPZ).

All Pakistan Textile Association (APTA) and All Pakistan Textile Mills Association (APTMA) sources said that have been informed by the government that the textile industry would not be cushioned. “We have been told by the senior government minister that they are giving nothing to us,” said a senior member of APTA