Textile industry hails govt’s move of releasing Rs65 billion for exporter payments

WEB DESK: The textile export industry has praised the government’s decision to release Rs65 billion for the payment of all verified pending refunds up until March 3, 2024.

This positive step by the Prime Minister is expected to enhance exporters’ confidence and stimulate the export sector.

On Tuesday, the Patron-in-Chief of the Pakistan Textile Exporters Association, Khurram Mukhtar, congratulated Prime Minister Mian Muhammad Shahbaz Sharif.

He emphasised the importance of prioritising measures to boost the economy, asserting that Pakistan’s progress is contingent on revitalising its ailing economy.

Expressing appreciation for the release of Rs65 billion for pending refunds, Mukhtar hoped for a similar approach in settling remaining refunds related to sales tax deferred, DDT/DLTL, TUF, and markup subsidy.

Presently, Rs50 billion awaits payment with the State Bank of Pakistan for DDT, TUF, and markup subsidy, while around Rs250 billion is held up with the Federal Board of Revenue for sales tax deferred, income tax, income tax credit, and duty drawback.

Mukhtar highlighted the adverse impact of high interest rates on industrialization, calling for urgent measures to alleviate the cost of establishing new industries. Current economic growth, especially in the industrial sector, faces significant setbacks.

Mukhtar attributed part of this decline to the inhibiting effects of high interest rates on investments, particularly within the industrial domain. He pointed out that, due to tough economic challenges, a considerable textile capacity has become non-functional.

In the absence of a rehabilitation mechanism, investments worth billions of rupees are turning into scrap. Mukhtar urged the new government to formulate a comprehensive policy to make idle units operative, potentially generating an additional US$1.5 billion in precious forex and creating over 200,000 new jobs.

The textile industry plays a vital role in the economy, contributing 60 per cent to the country’s exports and 8.5 per cent to GDP.

Mukhtar asserted that it has the infrastructure and capacity to double its export volume if obstacles hindering growth are eliminated.

Mukhtar stressed the urgent need to boost exports to narrow the ballooning trade deficit, which reached US$ 30.18 billion during the July–February period of the current fiscal year. He emphasised the necessity of developing a methodology for exploring new markets and increasing export volume.

The textile industry is currently unable to tap its potential due to high production costs and competitiveness issues. Mukhtar called for pragmatic policies, developed in consultation with stakeholders, to reduce production costs and create a level playing field.

Expressing high hopes for industrial prospects, Mukhtar highlighted the country’s longstanding need for serious and talented leadership to address challenges and trigger an economic revival.

He advocated for a shift towards value addition in the textile industry, emphasising that sustainable growth hinges upon it.

Mukhtar urged the new leadership to draw up a comprehensive action plan for economic revival and export growth, expressing hope that the economic managers of the new government would formulate pragmatic policies for sustainable economic growth.