Severe financial crunch: Textile policy 2009-14 unlikely to be implemented

Due to a severe financial crunch, textile policy (2009-14) is unlikely to be implemented, sources revealed to this correspondent. The textile policy was a reflection of the government's commitment to boosting textile exports to $25 billion in five years; however without implementing the accompanying incentives that would have created an enabling environment it is unlikely to achieve its export target, sources in the textile industry stated.
After the passage of more than two years of the policy, SROs of only 30 percent of the total announced schemes have been issued while the remaining are yet to be issued by the concerned departments. Government had announced different schemes as well as Drawbacks on Local Taxes and Levies' (DLTL) for textile sector in the textile policy. The pre-policy 60 percent Research and Development (R&D) pending dues that the policy committed to releasing have not yet been cleared. The ongoing financial crisis as well as the cumbersome registration process for obtaining past dues accounts for only ten percent of companies qualifying for R&D, textile exporters added.
Textile sector's pending liabilities against government under different schemes announced in the textile policy have swelled to Rs 10.7 billion, officials sources revealed. The textile policy also committed to providing regular supply of gas and power to the textile industry. However, it has failed to provide these facilities resulting in huge loss to the industry. Textile industry gets gas only 4 to 5 days a week and is further challenged with unscheduled power outages. In these conditions a further decline in investment in this sector is expected, sources maintained.
The government announced Technology Up-gradation Support in textile policy and later issued Technology Up-gradation Support Order 2010 (April) to provide incentives to textile machinery and technology with the objective of attracting investment in the textile sector. Under this scheme the federal government would pick-up 50 percent mark-up subject to a maximum of 5 percent per annum for projects exceeding investment of Rs 10 million in machinery or technology. However the government has yet to decide the specifications of the machinery/equipment eligible under the fund, resulting in delaying implementation of the incentives for textile sector.
The government has yet to finalise the list of machinery to be imported under this scheme. The government has yet to introduce the bill "Textile Development and Promotion Act", which was to monitor the implementation of the textile policy and to ensure accurate statistics of production capacity, exports and total number of textile units in the country.