The financial crisis in the textile sector is getting deeper with every passing day, particularly because of a dilly-dallying attitude of the government towards the relief calls from the sector. Presence of a banker in the office of advisor to prime minister on finance, said the industry circles, is not less than a stumbling block to an early financial relief to the industry.
According to them, the banking industry is also comfortable and taking no pressure of the situation after having a banker with a capacity to call financial shots in the finance ministry. The industry circles sincerely believe that the situation would have been different if a political person is sitting in the finance ministry.
However, those availing the opportunity of having the audience of the Prime Minister's advisor on finance in recent past are of the view that the government has pinned all its hopes on the release of aid package from the US. According to them, the finance advisor has categorically stated that nothing can be extended to the industry unless the government gets something from its friendly countries. Rather, a joke is becoming popular among textile circles that what the government would offer to the textile sector when it lacks sufficient funds to pay the Independent Power Producers (IPPs) in order to overcome the power shortage.
Interestingly, Shaukat Aziz, the predecessor of Shaukat Tarin, was also a banker by profession and remained hostile to the textile sector, particularly the basic one, throughout his tenure as finance minister of Pakistan.
The privatisation of all leading banks in the country has added salt to the injury, as it is only the National Bank of Pakistan (NBP) management that is ready to extend a patient hearing to the cries of textile sector. Rest of the banking industry, otherwise, is not ready to look at the situation through the lenses provided by the textile sector. The grim situation in textile industry is getting from bad to worse and many new entrants to the sector have already closed down their units. A good number of single spinning unit holders are on their way to closure. The weaving sector is breathing hard at the oxygen ventilator. The apparel sector is left in the lurch with the termination of 6 percent Research and Development (R&D) fund for 2008-09.
A scarcity of funds in the government kitty is resulting into deferment of all promises by the financial advisor to the prime minister. For example, the industry has demanded an immediate revision of the mark up rate to single digit, extension of export refinance and reactivation of subsidised financing. The finance advisor is deferring the implementation while promising to fulfil these demands 'within days' and 'not weeks.'
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