Textile sector has expressed disappointment over the recently issued SROs and notifications on first-ever-five-year textile policy. The relevant SROs have been issued w.e.f September 1, 09 for new duty drawbacks ie one percent on fabric, two percent on home textile, three percent on garments. Also 2.5 percent reduction in Export Refinance Mark-up and five percent interest disbursement on long-term outstanding loans up to 31st August 09.
Moreover State Bank has recently introduced another scheme of concessional financing up to 3 years @ 6% + 2% = 8% , 5 years @ 6.5% + 2.5% = 9% , 7 years @ 7% + 3% = 10% for Modernisation and upgradation of Technology of Plant & Machinery of Ginning sector in order to have quality cotton. The textile circles are of the view that the said SROs are merely eyewash and would have no tangible impact on textile industry, particularly the spinning sector.
According to them, the spinning sector, mother of all segments of textile sector, is directionless because of abnormal rise in bank interest rate and unprecedented load shedding. The cost of doing business has become out of proportion and majority of the single units is already closed down.
There is a general impression that the government was not serious in bailing out the textile sector. This impression becomes further relevant in the absence of exemption from load shedding, already extended to the textile sector and reiterated in the recently-announced textile policy.