ISLAMABAD: The Pakistan Textile Council (PTC), representing nation’s leading textile and apparel exporters, has requested the government to reduce energy prices and bring interest rates down. PTC has requested the Prime Minister for his personal intervention to address the most pressing such issues and help start restoring competitiveness of the value-added exporters.
In a letter to the Prime Minister, PTC expressed deep appreciation for the Prime Minister’s initiatives and his commitment to solve exporters’ problems. PTC further acknowledged that the PM’s accessibility and proactive approach has raised hopes and expectations about early resolution of exporters’ genuine problems.
Among the concerns highlighted by PTC are the exorbitant electricity prices, which remain a significant drag on the industry. PTC further highlighted that the blueprint presented to the government in mid-May, 2024 could serve as the under grid for a PTC market-based, subsidy-free solution to the power crisis leading directly to lower prices.
Additionally, PTC also recommends for a unified gas price for the entire nation, free of subsidies and cross-subsidies, which must be regionally competitive. This pricing regime could form the basis of meritocratic gas allocation ensuring gas supply to efficient users like process industries and most efficient IPPs. However, the lack of progress in this regard continues to hinder the industry’s competitiveness. PTC; however, expressed its concerns about little or no progress on the energy front.
Pakistan Textile Council has flagged the highest ever SBP’s Policy Rate, PR, at 22%, as a major concern for exporters and for public finances. It is high time that the PR be reduced in line with the recent CPI, 11.8% for May, 2024 and the KIBOR which has consistently been trending lower than the PR.
Rationalisation in of energy prices and aligning of the PR with macroeconomic fundamentals will help recover some lost advantage to the beleaguered exporters whose competitors do not face such abnormal and unjust energy and borrowing costs and are actually facilitated in ways unheard of in Pakistan.
Furthermore, PTC has raised alarm over the Finance Ministry’s failure to adhere to the Prime Minister’s Directive regarding release of certified Duty Drawback of Local Taxes and Levies (DLTL); etc., payables, PKR 37.7 billion. Despite appeals and the Prime Minister’s Directive, the Finance Ministry’s offer of a meagrely PKR 10 billion in the next fiscal year is not only patently absurd, but goes on to show how much the Prime Minister has to personally intervene to save the exporters from bureaucratic high-handedness.
Copyright Business Recorder, 2024