KARACHI, July 30: Textile tycoons in Karachi, Lahore and Rawalpindi wait anxiously for the much-talked about long-term textile policy as abrupt political developments and bomb blasts delay the presentation of a draft before the prime minister by Textile Minister Mushtaq Cheema.
� textile policy presentation meeting with the prime minister on Monday has now been put off till the next Monday,?a well-placed source in Islamabad informed Dawn by telephone.
The source disclosed that one such meeting with the prime minister was scheduled on July 27 (Friday) when international and national media reported a meeting between President Musharraf and the exiled PPP leader Benazir Bhutto. �bviously Friday was an inappropriate and an inauspicious day to discuss textile policy with the prime minister,?a leader of local textile industry said.
In the proposed presentation meeting several federal ministers and secretaries and senior officials of the State Bank will also participate to share their respective perception on textile scene and give their input after which policy will be vetted and submitted to the federal cabinet for presentation.
�o not mix up fiscal concessions (rebates) and monetary policy issues (concession rated long-term loans) with textile policy,?the well-placed source advised when asked how long the government intended to continue to support the textile industry with subsidy being offered at the rate of 6 per cent on garments?exports since 2005 and is being continued in the current fiscal year.
Since 2006, the government offered 5 per cent subsidy on export of home textiles and 3 per cent subsidy on export of fabrics.
Besides this subsidy, which is said to have cost State Bank about Rs12 billion in 2006-07, the textile industry is also being given concession rated loans at 7.5 per cent interest rate.
Since May 2005, textile mills have swapped Rs34 billion high interest rates with 7.5 per cent interest loans and a fresh financing of Rs15 billion was given.
A source closely associated with the exercise of framing new textile policy disclosed that the government might be asked to continue these fiscal concessions and bank loans incentives but with a target.
A private consultancy report has revealed that the subsidy on textile export has been literally squandered away by the commercial exporters while the manufacturers and industry did not benefit much from these incentives.
�e now want to approach textile industry with these cash incentives with a target,?confided the source who said that textile operators would be asked to develop linkages to justify these cash rebates and long-term concession rated loans. For example a spinner will be entitled of these cash incentives if he invests in weaving.
Spinners and informal weavers are desperate to get subsidy on export of yarn and grey cloth and they have been lobbying for last few years.
Releasing reports in media of closure of one mill after the other and loss of jobs of workers were the time-tested tactics of these mills operators with which they have been pressurising all the governments for last many years and are doing so now also.
Yarn output in Pakistan has increased considerably is last five or six years because bulk of the $5 billion investment in textiles went to spinning. While the yarn output increased in Pakistan, its demand in Bangladesh, Turkey, China and other Far Eastern countries declined as many of these countries invested in spinning capacities.
The textile policy will focus on maximum utilisation of cotton and yarn by the domestic value-added industry,?the source said. Emphasis will be on upgrading the skills of the workers, machine operators and supervisors of the textile industry to bring down production cost, cut down on wastages and improve quality of the products.
� textile policy presentation meeting with the prime minister on Monday has now been put off till the next Monday,?a well-placed source in Islamabad informed Dawn by telephone.
The source disclosed that one such meeting with the prime minister was scheduled on July 27 (Friday) when international and national media reported a meeting between President Musharraf and the exiled PPP leader Benazir Bhutto. �bviously Friday was an inappropriate and an inauspicious day to discuss textile policy with the prime minister,?a leader of local textile industry said.
In the proposed presentation meeting several federal ministers and secretaries and senior officials of the State Bank will also participate to share their respective perception on textile scene and give their input after which policy will be vetted and submitted to the federal cabinet for presentation.
�o not mix up fiscal concessions (rebates) and monetary policy issues (concession rated long-term loans) with textile policy,?the well-placed source advised when asked how long the government intended to continue to support the textile industry with subsidy being offered at the rate of 6 per cent on garments?exports since 2005 and is being continued in the current fiscal year.
Since 2006, the government offered 5 per cent subsidy on export of home textiles and 3 per cent subsidy on export of fabrics.
Besides this subsidy, which is said to have cost State Bank about Rs12 billion in 2006-07, the textile industry is also being given concession rated loans at 7.5 per cent interest rate.
Since May 2005, textile mills have swapped Rs34 billion high interest rates with 7.5 per cent interest loans and a fresh financing of Rs15 billion was given.
A source closely associated with the exercise of framing new textile policy disclosed that the government might be asked to continue these fiscal concessions and bank loans incentives but with a target.
A private consultancy report has revealed that the subsidy on textile export has been literally squandered away by the commercial exporters while the manufacturers and industry did not benefit much from these incentives.
�e now want to approach textile industry with these cash incentives with a target,?confided the source who said that textile operators would be asked to develop linkages to justify these cash rebates and long-term concession rated loans. For example a spinner will be entitled of these cash incentives if he invests in weaving.
Spinners and informal weavers are desperate to get subsidy on export of yarn and grey cloth and they have been lobbying for last few years.
Releasing reports in media of closure of one mill after the other and loss of jobs of workers were the time-tested tactics of these mills operators with which they have been pressurising all the governments for last many years and are doing so now also.
Yarn output in Pakistan has increased considerably is last five or six years because bulk of the $5 billion investment in textiles went to spinning. While the yarn output increased in Pakistan, its demand in Bangladesh, Turkey, China and other Far Eastern countries declined as many of these countries invested in spinning capacities.
The textile policy will focus on maximum utilisation of cotton and yarn by the domestic value-added industry,?the source said. Emphasis will be on upgrading the skills of the workers, machine operators and supervisors of the textile industry to bring down production cost, cut down on wastages and improve quality of the products.
