The textile industry’s stakeholders termed the federal budget 2009-10 disappointing and termed it ‘a game of juggling numbers’.
The State Minister for Finance & Revenue Hina Rabbani Khar did not explained in her budget speech as to how the government was going to revive the industrial sector, particularly textile industry, which contributes 67 per cent to the country’s total exports, stakeholders said.
Pakistan Readymade Garment Manufacturers & Exporters Association (PRGMEA) ex-chairman, Ejaz Khoker said that the Prime Minister Syed Yousuf Raza Gilani and the Advisor to PM Shaukat Tarin had made a number of commitments to bailout the textile industry, but Khar announced nothing as such.
About three million people are employed by the textile industry and another three million indirectly, but the state minister said nothing for the revival of the sector, he further said.
Moreover, the imposition of new taxes on import of raw materials and withdrawal of cross subsidies on electricity and gas would make the industry further incompetent in the region, particularly with competitors like China and Bangladesh, Khoker underlined.
Pakistan Bedwear Exporters Association (PBEA) Chairman Shabbir Ahmed, said that the budget illustrated no planning at governmental level as it suggested no solutions to the deteriorating condition of textile industry.
He endorsed that Tareen had made high claims to announce incentives for textile industry before the budget session but did not fulfill his words, he said.
The budget failed to address anything regarding industrialisation; how to enhance exports; how to increase foreign exchange reserves and how to create employment opportunities in the country, he highlighted.
Khar, however announced to constitute a fund of Rs40 billion for export promotion, but the government would contribute only Rs10 billion, he quoted and questioned of who will provide the rest of Rs30 billion for the fund. The document would provide further details in this regard, he said.
The high rate of mark-up, depreciated rupee value and end of cross subsidies on electricity and gas would further add to the cost of doing businesses and would result in closing down of more industries, he foresaw.
Pakistan Leather Garments Manufacturers & Exporters Association (PLGMEA) Chairman Fawad Ejaz, said that doubling of Withholding Tax (WHT) from two to four per cent on import of raw materials for the whole industry would play havoc.
PLGMEA however were not being charged this two per cent on imports till today, but one per cent, as a special incentive only given to them. If this incentive would continue then it will be ok. In other case, industry will suffer greatly, as this refundable levy is refunded back to the manufacturers in three to four years period, he added.
Moreover, the end of Presumptive Tax Regime, under which his industry was paying one per cent on the receipt of exports proceeds, would revive the bribe bazaar, he added.
