‘Budget pulled wool over apparel industry eyes’

KARACHI: Federal Budget 2017-18 has betrayed the hardly buoyant value-added textile sector as it bore no measures to stabilise the exports that are almost in a freefall for the last very many years, disgruntled industry leaders said on Saturday. 

 “It is a very disappointing budget for the value-added sector,” Ijaz Khokhar, central chairman Pakistan Readymade Garments Manufacturers and Exporters Association, said while talking to The News. 

“We were expecting some funds and implementation of Textile Policy, but there was no mention of these in the finance minister Ishaq Dar’s budget speech.” 

Khokhar said the finance minister only announced that refund payment orders (RPOs) would be issued in two phases, but the deadline for the first phase was until the end of August, while no deadline was given for the next phase. “These RPOs are mere 20 percent of total refunds of above Rs200 billion,” he said. 

He noted that liquidity crunch was the major hurdle slowing down the exports but the government was not even ready to realise the gravity of the issue let alone address it. “There was no announcement about a policy for ensuring sustainable exports,” Khokhar said. 

He said the government’s attitude, as exhibited in the budget, left the stakeholders with no doubt that the private sector was on its own. “The budget dashed all the hopes that this government would pay up the refunds,” he said and added, “We don’t see the exports going anywhere near the target set in the budget.” 

Javed Bilwani, chairman Pakistan Apparel Forum and All Pakistan Exporters Association, said that except for the continuation of zero-rated scheme, there was nothing encouraging in the budget. “Clothes from the neighbouring countries are being smuggled into Pakistan because the rising cost of production has pushed the local prices up,” Bilwani said. 

Giving a regional comparison, he said that Pakistan’s exports’ share in the GDP was only 6.34 percent, Bangladesh 13.9 percent, while Indian exports contribute above 10 percent.

“In order to support the textile sector, the government must announce separate utility tariff for it and bring it at par with the neighbouring countries,” he said and added, “Also, the textile sector should be exempted from the rampant load shedding,” Bilwani stressed.  He came down heavy on the budget calling it extremely upsetting. “I don’t think there will be any improvement in the textile exports going forward. They will just continue to languish the way they have been for quite a while now,” Bilwani remarked. 

Naseem Usman, chairman Karachi Cotton Brokers Association, minced no words, saying that there was nothing new in the budget for the sector. “The proposals of textile associations and ginners were nowhere to be seen in it,” Usman said. On the other hand, he added, the debt burden of the government remains there, while no incentive was announced to salvage the sinking exports.

“Some incentives have been announced for the farmers but they will never reach them,” a dismayed Usman said ironically.