Steps include export refinance at low rates, relief on existing long-term loans TAHIR AMIN
The government on Wednesday unveiled the first-ever five-year National Textile Policy, setting the export target of $25 billion for five years. Federal Minister for Textile Industry Rana Farooq Saeed Khan announcing the incentives-laden textile policy for next five years (2009-14) on Wednesday said the government has transformed the vision of Benazir Bhutto into reality by taking immediate measures for priority to gas and electricity load management, export refinance at low rates and relief on existing long-term loans.
In the new textile policy restructuring and reorganisation of the textile sector is also on the cards, which includes drawback of local taxes refund of past R and D claims and magnetisation of PTA, he added. The key initiatives taken under the policy are creation of Textile Investment Support Fund (TISF); Technology Upgradation Fund (TUF); Infrastructure Development; Skill Development; Zero Rating of Exports; Tax free import of machinery and Rationalisation of tariff structure.
The policy also envisages removing regulatory bottlenecks ie market access; marketing support, export house scheme, marketing insurance scheme and improving information and communication technology. The sub-sectors initiatives includes fibers, ginning, filament yarn, shipping, weaving and knitting, non-woven, processing, home textiles, garments, fashion and design, technical textiles, handlooms, handicrafts and carpets. The policy also encompasses indigenization, women employment support programme and support for disabled and handicapped.
APP adds: The Federal Minister, Rana Muhammad Farooq Saeed Khan, said that the Textile Policy was prepared in consultations with all stakeholders including industrialists, exporters, agriculture experts, investors, SBP and other relevant public and private sector representatives to make it result-oriented. Rana said that Pakistan textile sector had to face many difficulties including lack of latest machinery, shortage of electricity, gas, water and skilled manpower, adding that the policy has been prepared keeping in view all these challenges.
He said that Pakistan was lagging behind in value addition and the new policy envisages double it during next five years. The Federal Minister said that government would establish Technology Upgradation Fund to encourage investment and adoption of new technology.
Under the scheme, he added, the government would pay 50 percent of the mark up on the investment in new plants and machinery. He said that government would establish Industrial Estates in line with Garments and Textile Cities and would provide all necessary facilities. In addition, Rana said, that clusters would be established for small investors where all basic facilities including electricity, gas and water would be provided. Research Centers, Product Development Centers and Laboratories would be established in these clusters.
In addition, he added, assistance would be provided for setting up Effluent Treatment Plant and government would also encourage establishment of storage, warehousing and marketing. The federal minister said that the government has allocated Rs one billion for the improvement of infrastructure during this financial year.
He said that 0.5 million skilled manpower would be trained during next five years with the help of industry to overcome the shortage of skilled manpower. Federal Minister for Textile, Rana Muhammad Farooq said that the government has allocated Rs 1 billion for the skill development. He said that the government was formulating law for standardisation of value chain to ensure production of quality products.
He said that government was principly agreed that there should be no tax on exports and would try to minimise the direct or indirect taxes which increase the cost of production. He said that measures would be taken to protect local industry by rationalising tariff structure adding that all laws hurdling the development of sector would be removed or simplified.
FTAs would be signed with different countries to seek market access and the government would also help labelling and branding of products to enhance local trade. Export houses would be introduced and yarn and fabric sale to these houses would be considered as export to enhance exports.
Besides, he added the government would provide 1 percent draw back to small industrialists and has allocated Rs 2 billion for this purpose. He said that government would introduced insurance schemes to compensate exporters' losses and it was striving to involve IFIs for this purpose. He said that Information and Communication Technology would be utilised to enhance production.
The Minister said that the policy covers all sub-sectors like ginning, weaving, spinning, knitting, processing, fashion, carpets and technical textile. He said that pollution problems in cotton would be resolved under Cotton Standardisation and Cotton Control Act adding that private sector companies would be established for classification and grading of cotton.
Long staple cotton would be introduced to fulfil the domestic needs while production of BT cotton would be encouraged besides enhancing cultivation of organic cotton. One of the main purpose of the policy was promote man made fabrics which he said was profit-full for the country and MMF industry would also be promoted and safeguarded under NTC.
The Minister said that steps would be taken to increase production of natural fiber like Jute, flax and wool in the country. Ginning Research Institute would be established in Multan and the facility would be extended to other cotton growing areas of the country, he added. Federal Minister for Textile Industry Rana Muhammad Farooq Saeed Khan said that there was dire need of promoting Filament yarn industry, saying that the government would develop it through Synthetic Fibre Development and Application (SFDAC).
Courtesy: Business Recorder
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