Extreme cash flow crunch and high energy prices are hampering the export growth and adversely impacting the industry. Exports are falling consistently both in value and quantities; Government's immediate intervention is solicited to check the drastic downfall in exports, said Ajmal Farooq, Chairman and Muhammad Naeem, Vice Chairman Pakistan Textile Exporters Association.
Commenting over the prevailing problems faced by the textile industry and exports sector, they termed severe liquidity crunch and high energy prices as major cause of export decline. They appealed the Government to rescue the ailing textile industry as extreme cash flow crunch has squeezed the financial streams and breading liquidity jerks.
They said massive working capital of textile exporters has been held in sales tax, custom rebate and income tax refund regime increasing the financial stress and textile exporters are unable to enhance their export turn over. The situation has further complicated as the initiatives announced in textile polices under incremental exports scheme (DLTL), Markup Support and technology upgradation fund scheme are still unpaid, they added.
This is having adverse impact on the employment and the economy of the country. Lack of basic working capital has been a cause of serious concern for exports and a major setback to industry, they said and added that under current refund regime, affected claimants are not in a position to utilise liquidity, which they utilise four times in a year for manufacturing and exporting of consignments. Finance is imperative to run the wheel of industry but without it, no one could even think to run industry. Government should set its priorities right and accord preferential treatment to boost the exports and generate industrial activities.
Expressing concerns over high energy prices, PTEA Chairman Ajmal Farooq condemned the government's indifferent attitude towards the Punjab-based textile industry as it is facing a serious blow of non-viability due to the high cost of doing business. Industries in Punjab are compelled to use high priced RLNG; whereas industries in other provinces are supplied system gas at reduced tariff. Addition of other charges especially UFG has further increased the cost rendering Punjab industries unviable. He expressed deep remorse that the textile industry has been left unattended as no one is ready to kill the disparity in energy cost of textile industry based in Punjab against other provinces as well as the regional competitors.
They demanded the Government to bail out textile industry and exports from financial crisis by immediately releasing of stuck-up amounts in refund regime. They further demanded to supply gas to the industries on equal prices across the board enabling them to retain their competitive edge in international market.