Textile industry stakeholders expressed serious reservations over the inordinate delay in announcement of Textile Policy 2014-19. The industry is operating without any policy for about last seven months, depriving the industrial units of due benefits, it is learnt.
Official sources told Business Recorder that a consultative meeting was held with Federal Minister for Textile Industry, Abbas Khan Afridi in the chair to have inputs of textile stakeholders on draft textile policy. The minister directed the authorities concerned to forward the amended draft to the Planning Commission and urged placing it before the next ECC meeting. The proposals from the Planning Commission were discussed and incorporated in the textile policy.
Though all stakeholders unanimously sought direct control for utilisation of its share in the Export Development Fund (EDF) from textile ministry; however the Planning Commission failed to give any response and instead asked for more time. Ministries of commerce and textile industry were not on the same page with 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. The Commerce Ministry utilises EDF for projects approved by the EDF Board headed by the Minister for Commerce. However, now the Textile Ministry wants its due share in the EDF. Planning Commission agreed with the proposal of textile ministry and gave nod to incorporate it in the draft policy, sources added.
Textile policy 2014-19 envisages Pakistan as a leading value-added textile exporting country, besides it provides employment to about 40 percent of industrial labour force, consumes more than 40 percent banking credit and accounts for more than 8 percent of the GDP.
According to officials of textile ministry, a five-pronged strategy has been chalked out to make the textile sector competitive and sustainable. Budgetary support, drawback of local taxes and levies, easy finance, sales tax regime, duty free import of machinery, policy interventions, tariff rationalisation, fiber diversification, product diversification, SME development, enactment of domestic labour laws, revival of sick units, marketing strategies, technology up-gradation, establishment of world textile centre & model cotton trading houses, revitalisation of projects like Pakistan Textile City, garment cities and capacity building of the ministry and related organisations are the salient features of the textile policy.
Textile policy 2014-19 aims to double value addition from $1 billion per million bales to $2 billion per million bales in next five years, double the textile exports from $13 billion to $26 billion and facilitate investment of additional $5 billion in machinery and technology. Representatives from PTEA, APTMA, PHMA, PRGMEA, towel manufacturers association, Pakistan Apparel Forum and other textile organisations attended the meeting and accepted the policy draft.
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 noted 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 which was later to be placed before the ECC for approval.