The proposed textile policy (2014-19) has been delayed after serious differences among key ministries over crucial parts of the policy including, gas supply, Export Development Fund (EDF) and development projects, it is learnt. The Economic Co-ordination Committee (ECC) of the Cabinet met on October 30, 2014 to discuss a draft textile policy in detail and sought improvements in various proposals mooted in the draft.
For the purpose, a Committee headed by Minister for Planning, Development and Reforms Ahsan Iqbal was constituted to review the draft policy till November 15 after which it would be placed before the ECC for approval. Official sources told Business Recorder that Ahsan Iqbal sought proposals from all stakeholder ministries but several reportedly failed to submit their inputs. After receiving a negative response, Ahsan Iqbal sought an additional month to finalise the draft, urging all ministries to submit their inputs.
According to the draft of the textile policy, the government will take measures to give priority to textile sector for availability of gas and electricity to fully utilise the GSP plus status. However, the Petroleum Ministry informed the Finance Minister-led committee on energy issues for textile industry that no gas would be available for textile industry during winter though gas supply would continue till the final decision of the committee.
In case of gas suspension the proposed textile policy would become irrelevant before its announcement which explains why Ahsan Iqbal has sought an additional time to resolve the issue in consultations with all stakeholders. Further, ministries of Commerce and Textile Industry are not on the same page in respect to ownership and utilisation of billions of rupees in the EDF. The federal government collects 0.25 percent as EDF on almost 85 percent exports and deposits it in the accounts of Finance Ministry - a fund utilised for the development of export-oriented sectors. Contribution of textile sector to EDF is 55 percent. Annual collection of EDF hovers around Rs 5 billion per annum but the Finance Ministry has, on average, released about Rs 1 billion per annum to the Commerce Ministry for different projects.
Commerce Ministry utilises EDF for projects approved by the EDF Board headed by the Minister for Commerce. However, now Textile Ministry wants its due share in the EDF, said sources, adding that Commerce Ministry failed to submit its input to the Ahsan Iqbal-led committee.
The proposed textile policy envisages textile exports of the country at $26 billion, besides creating 3 million job opportunities in next the five years. However, it requires about Rs 120 billion, including Rs 45 billion outstanding amount under different schemes of the previous policy, to achieve the export targets. The government is facing a financial crisis and the Ministry has reportedly been asked to rationalise projects in the proposed textile policy, sources added.
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