ISLAMABAD: Leading textile units and big textile manufacturers on Wednesday warned to “hand in keys of their factories to the Ministry of Finance”, if the government did not restore electricity and gas subsidies from July 1, 2023.
In the second session of the Senate Standing Committee on Finance, Wednesday evening here at Parliament House, the representatives of All Pakistan Textile Mills Association (APTMA) issued this warning to the government.
The APTMA representatives stated that the prices of electricity for the textile sector stand at eight cents for electricity and 6.5 cents for gas in India, 10 cents for electricity and 7.5 cents for gas in Bangladesh while prices of electricity and gas will be much higher in Pakistan.
It will be catastrophic for the textile sector after abolishing subsidized rates. “We demand regional competitive prices to boost dwindling exports. We will come with keys of factories to hand over to the Ministry of Finance,” they added.
The APTMA representatives further pointed out that the prices of electricity for the industrial sector had gone up from Rs20 to Rs40 per unit and recently, the Ministry of Power informed the PM that the price of electricity could go up to Rs49.5 per unit in the next financial year.
Under the IMF programme, the government has scrapped the subsidy of electricity and gas for the textile sector from the next financial year.
The de-industrialisation, they argued, was underway in the country especially in Punjab as the exports might come down from $31.5 billion to $26-$27 billion.
Textile exports might come down from $19 billion to $16 billion for the current fiscal year.
The representatives of packaged juices industry requested the committee to abolish the 10 percent excise duty. The government had increased the excise duty last year which has not resulted in any revenue gain for the government. It has also caused a substantial decrease in sales.
The representatives of the Pakistan Association of Large steel producers briefed the committee about problems being faced by the steel industry in Pakistan. They were of the view that the supply of local steel scrap should be exempted from sales tax under section 13 of the Sales Tax Act, 1990. They also suggested that the income tax withholding rate on scrap supplies to be reduced to 0.25 per cent under section 153 of the Income Tax Ordinance.
Representatives of the APTMA briefed the committee about the problems faced by the textile industry in Pakistan. They informed us that in the current budget, there is no subsidy for electricity and gas for the textile industry which will create problems for the industry.
The government must amend the budgetary proposals and provide much-needed relief to the textile industry as 20 million human resources are attached to the textile industry. They said that already 50 per cent of textile units in Punjab have shut down due to an increase in the cost of production. If the subsidy is not provided 25 per cent more units will shut down.
They suggested that according to the previous year’s budget subsidy on electricity and gas may please be extended to the textile industry for its survival.
Copyright Business Recorder, 2023
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