Value-added textile sector on Wednesday opposed the government's move to impose the gas infrastructure development cess of Rs 100 per MMBTU on industries in the finance bill 2012-13, saying it would badly hit the manufacturing sector. Addressing a joint press conference at the PHMA House, representatives of a number of associations of value-added textile sector advised the government to avoid generating revenue through utility bills.
"The government should enable the industries to operate at full capacity by providing uninterrupted supply of gas and electricity, instead of curtailing key utilities to manufacturing units," said the Chairman Value-Added Textile Forum, Rana Muhammad Mushataq Khan.
Criticising the federal government for making the cess part of the finance bill, he said that it had been done without taking the textile sector into confidence. He warned that manufacturers and exporters would be compelled to shut their units if the government did not reverse its decision.
"Gas is supplied to industries only five days a week. For two days, it remains suspended," complained Rana. He said that local export products would be unable to compete in the international markets because of unabated increase in the cost of production.
Pointing out Pakistan's rival countries kept utility tariffs unchanged for their industries, he said that Pakistan's industries were paying far higher rates for gas and electricity than any other country in the region. "Exporters earn billions of rupees in foreign exchange for the national exchequer, increasing the foreign exchange reserves. Therefore, the government should facilitate export-oriented industries," appealed the Chairman of the Value-added Textile Forum.
Rana pointed out that the country's total textile exports had declined by 25 percent during the first 10 months of the current fiscal year and the imposition of cess would further hurt the manufacturing sector's prospects. Chairman of Pakistan Apparel Forum Muhammad Jawed Bilwani pointed out that the gas tariff in Pakistan for industries was 183 percent higher than gas rates in Bangladesh.
He said that the textile sector generated 42 percent of the country's total employment, fearing that the continual rise in the cost of manufacturing would hurt the sector's job creation ability. Vice-Chairman of Pakistan Apparel Forum Rafiq Godil said: "Textile sector's non-performing loans have touched Rs 170 billion in just one and a half years." He said the country's textile exports are expected to fall by $4 billion this fiscal year because of unfavourable conditions.
Chairman, Pakistan Knitwear & Sweater Exporters Association, Kamran Chandna, former chairman of Pakistan Cotton Fashion Apparels Manufacturers and Exporters Association Khwaja Usman, Chairman of Pakistan Denim Manufacturers and Exporters Association (PDMEA) Khalid Majeed, Member of PRGMEA's Executive Committee Younus Khamisani and others raised concerns during the press conference. A member of the Towel Manufacturing Association, Muzzammil Hussain also spoke on the occasion.