The fate of textile industry is in limbo as the government refused Textile Ministry''s demand to allocate Rs 35 billion for different initiatives that were integral components of the textile policy (2009-14) in budget 2011-12, Business Recorder has learnt reliably.
According to the budget documents, there is no subsidy for textile industry and the government has made no allocation for different schemes under the textile policy including Textile Investment Support fund, drawback of local taxes, refund of past Research and Development (R&D) claims, mark-up rates and magnetization of Purified Terephthalic Acid (PTA).
Informed sources revealed that Textile Ministry had proposed to the government to allocate Rs 35 billion in the budget for 2011-12 for different initiatives but received no allocation in the budget. The government had announced Rs 42 billion for textile export promotion under the textile policy in the budget 2010-11 of which 67 percent was to be spent on textile and clothing industry with a view towards consolidation and value addition of the sector.
However, the Ministry received only Rs 7.75 billion in 2010-11. Similarly, in 2009-10, the year when textile policy was announced, the government had earmarked Rs 40 billion for different initiatives of the policy. However, the Ministry received Rs 9.75 billion in 2009-10. Under these circumstances, it is unlikely that textile policy would achieve the desired results. Due to meager release against the promised amount by the government, most of the initiatives announced in the textile policy have not been implemented, sources maintained.