The textile sector is aghast over the mysterious silence of Finance Minister Dr Abdul Hafeez Shaikh that he has not announced any incentives for this important contributor to national kitty in the shape of levies and taxes.
Chairman, Towel Manufacturers' Association of Pakistan (TMAP), Feroze Alam Lari in a statement issued here on Thursday said, Finance Minister has not announced a single incentive in the budget 2012-13 for textile sector, which contributes approximately Rs 123 billion to national kitty in the shape of duties, taxes and levies etc, and has a major share in the foreign exchange earning of the country.
He cited neighbour India, which has earmarked recently Rs 350 billion loans for structuring of its textile industry. In order to compete with our neighbour competitors, government should provide its textile industry a level playing field, which is already in a bad shape. If immediate remedial measures and incentives are not provided by the government, we would be wiped out from the export trade of the world map as non-performing loans of the industry have reached their peak.
It is imperative that Finance Minister call a meeting of textile sector stakeholders to find ways and means for the survival of textile industry, he said. According to Federal Bureau of Statistics, the exports of textile items - July to June 2010-11 periods stood at $13,362,101,000. Contribution to Export Development Fund (EDF) which is deducted at 0.25 percent on the exports of textile items stood at Rs 3,006,472,725 and indirect taxes and levies etc, at 10 percent amounted to Rs 120, 258, 909, 000. Total revenue collection on export of textiles amounted to Rs 123, 265,381,725.
According to daily market news, the Indian government has requested banks to restructure Rs 350 billion worth of loans for the country's textile sector. Of this sum, close to Rs 270 billion is reported to go to cotton mills and Rs 360 million to the man-made segment. Approximately 2,000 textile units, which are mainly located in the southern Indian state of Tamil Nadu, and the man-made fiber segment in the western Indian state of Gujrat will be the main beneficiaries. The loan restructuring package was finalised after Indian finance minister met with Indian commerce, industry and textiles minister. The package includes a two-year interest moratorium and eroded working capital will be converted into loans with three to five year term. India's textile industry is currently under the influence of volatile yarn prices as well as a demand slowdown in major markets.
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