Govt takes steps to revive ailing textile sector

16 Feb '07

2 min read

In order to catch up with the export competition in the international markets the Government of Pakistan is proposing to subsidize 40 percent of the utility bills, for the textile industry.

This proposal would prove a major incentive for the struggling sector due to increased competition from China, India and Bangladesh.

Though the Pakistan Government has approved Rs25 billion incentive packages for the textile sector, it will not be able to fully support industry to protect its existence in the global markets.

That is why the Government is planning to give further tax concessions for textile sector to cut cost of production in the industry. The tax relief will help the industry to be more competitive in the global textile market.

The share of textiles exports in the country was about 60 percent of the total exports in fiscal year of 2005-06, and it creates some 38 percent employment opportunities in the manufacturing sector of the country.

Government has also decided to allow a six percent compensatory rebate for the electricity, gas and other services consumed in the textile export oriented units like ready made garments and knit wear sector in the country and this scheme continued upto end of June 2006.

In addition dyeing and printing of fabrics and white home textiles, both woven as well as knit declared eligible for R&D support will get a rebate at the rate of three percent whereas dyed/printed home textiles, wovenand knit, were allowed to avail similar support at the rate of five percent.

These steps of the Government will definitely increase the efficiency and productivity of the textile sector.

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