Lack of funds: Ministry facing problems in implementing Textile Policy 2009-14

Due to inadequate funds, Textile Ministry is facing problems in the implementation of textile policy (2009-14), it is learnt reliably. Textile policy may not achieve the desired results as the government has allocated Rs 7.5 billion against a demand of Rs 46 billion for different initiatives of the policy, informed sources in the Textile Ministry revealed to Business Recorder.
The government had released Rs 9.75 billion against Rs 42 billion announced for the last fiscal year to implant different initiatives of the textile policy. Due to meager release against the promised amount by the government, most of the initiatives announced in the textile policy have not been implemented.
Sources revealed that the said amount was aimed to achieve the export target of 25 billion dollars in the next five years by providing mark up rate on export refinancing and rebate on fabric, home textiles, drawback of local taxes, refund of past Research and Development claims (R&D), magnetisation of PTA and garments.
The Ministry had issued three notifications for the implementation of the Policy, under which textile manufacturers would receive three percent drawback on garments, two percent on home textile and one percent on fabrics. But due to inadequate funds the Ministry is facing problems in the policy implementation, sources added.
Key features of the policy included infrastructure development, skill development, tax free import of machinery, rationalisation of tariff structure, removing regulatory bottlenecks ie market access, marketing support, export house scheme, marketing insurance scheme and improving information and communication technology; however, the Ministry has failed to implement any of these initiatives, sources maintained.
The textile policy promised undisturbed supply of power and gas to the industry, but gas load shedding and power breakdown is continuing, sources added. Out of a total allocation of Rs 42 billion for 2009-10, Textile Ministry earmarked Rs 17 billion for drawback but due to inadequate release by the Finance Ministry, it released only Rs 2.7 billion.
Similarly, Rs 5.4 billion was allocated for 60 percent remaining R&D claims, but the Ministry released only Rs 3 billion. Rs 4.5 billion was allocated for magnetization of PTA, but only an amount of Rs 1.7 billion has been released. Similarly, Textile Ministry has released Rs 1.25 billion against Rs 5 billion for mark up rate due to non-availability of sufficient amount. Sources in value-added sector said that all the stakeholders had appreciated the textile policy, but it has proved a failure because of the many challenges being faced by the sector including slow implementation of the policy.