Reduction in GIDC welcomed: textile exports likely to increase by 10 to 15 percent: APTMA

Exports of textile sector are likely to increase by 10-15 percent during next one year with support of relief recently announced by the government. Addressing a press conference here on Monday, Yasin Siddik, Chairman All Pakistan Textile Mills Association (APTMA) Sindh Balochistan zone has welcomed the government decision to reduce Gas Infrastructure Development Cess (GIDC) and export refinance rate.
He said that on the demand of APTMA, President Asif Ali Zardari and Advisor to the Prime Minister on Petroleum and Natural Resources, Dr Asim Hussain has announced 50 percent cut in the already imposed GIDC on the industrial sector of the country. Now, it will be charged at Rs 50 per MMCF for the industrial consumers as against Rs 100 per MMCF was announced in the Finance Bill 2012-13, he informed.
"GIDC worth of Rs 100 MMCF was imposed on the industrial sector with w.e.f. July 01, 2012 with an objective to arrange funds for the multi-billions Iran-Pakistan (IP) gas pipeline project, Turkmenistan-Afghanistan-Pakistan-India gas pipeline project and LNG import projects", he mentioned. However, the rate of Rs 100 per MMCF was unanimously rejected by the industry and APTMA make serious efforts to reduce the rate, Siddik said.
"Our demand was less than Rs 50 per MMCF GIDC for industrial sector, however current decrease in the rate will also support the ailing industry, which is already facing many challenges including energy, law and order and poor infrastructure", he added. After the reduction in GIDC a perception has created that APTMA is much strong body and this decision will resulted in revenue loss to national exchequer. "We rejected this perception and made it clear that APTMA's demand of reduction in the gas infrastructure development cess for industrial sector was only to make Pakistani exports in the global market competitive with the similar products of other countries", he pointed out.
Presently, Pakistani textile products are facing stiff competition in the global market as a result of serious energy crisis, and in this situation industry is not able to pay Rs 100 per MMCF GIDC, he added.
He said that the country's textile industry is already paying high gas tariff compared to regional countries. Gas tariff of Bangladesh is stood at 6.45 cents per cubic meter whereas it is 18.23 cents cubic meter in Pakistan, showing a difference of 182 percent, he mentioned.
He also hailed the SBP's decision to reduce rate of Export Refinance Scheme by 1.50 percent. This will support the industry to get loan for export purpose at lower rate, he said. He said that government has also announced to launch Technology Up-gradation Scheme for the textile industry, under which 5 percent interest rate subsidy will be provided to industries on up-gradation loans.