The Prime Minister Shaukat Aziz is likely to announce a relief package for the textile sector this week. The long-awaited textile package is likely to overcome the present difficulties being faced by the sector, owing to tough competition from China, India and Bangladesh and high cost of doing business in Pakistan.
The sources said that there has been a continuous activity on the instructions of the Prime Minister. Reports writing on textile, inviting consultants, arranging meetings of standing committee to improve the declining textile exports. The government could not cope with the situation and failed to respond to the suggestions effectively.
It has also been learnt that the government kept on avoiding subsidy on utilities fearing to promote the subsidy culture. But this was one of the major demands of the textile sector. Standing committee on textile could not motivate the government for taking any immediate step. The Motiwala report was presented to Prime Minister Shaukat Aziz in May 2006 and Saigol's report in the last week of November last year.
The sources informed that Tariq Saeed Saigol's report is no different than that of Zubair Motiwala's, both demanded similar facilities for the textile sector to reduce cost of doing business in the country.
The only minor difference between the two reports is on gas rates reduction ie 25 percent in Saigol's report and 40 percent in Motiwala's. Saigol's report also looks for some incentives for ISO-certified textile industries, the source added.
Some foreign consultants were also called to investigate the working of the textile industry. They visited spinning and weaving sectors. They will conduct investigation for complete chain of the textile industry, which is still under process. Regarding spinning and weaving they have pointed out some weaknesses of the sector. They said that there was over-employment in the sector with unskilled manpower. The consultants said that the yield from 100 kg of cotton in Pakistan is 80 kg of yarn, but in other countries it is 90 kg. Cotton is contaminated despite being handpicked.
There is a need to improve the picking of cotton flower in neat cotton bags. The practice of polythene bags and collection of cotton in dirty bags or in open should be stopped to get better results. They further suggested that high cost of doing business is also the result of greater number of employees as well due to unskilled labour, the machinery is not being efficiently utilised, which is either affecting the quality or production, or both.
The Prime Minister, therefore, is very careful in granting any facility to the sector, prior to screening complete picture of the textile industry. China, India, Bangladesh have improved their textile exports after the implementation of free trade agreement, while Pakistan slipped.
The delay in decisions to facilitate the sector on account of reducing utilities' rates, taxes etc, is hindering the sector to benefit from the free trade agreement under the WTO regime.
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