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Budget devoid of incentives for yarn, textile and ginning firms

08
Jun '10
As against the promise that, the Prime Minister, Yousaf Raza Gilani, had made to the yarn, textiles and ginning sectors, for a specific budget for them, during the announcement of the federal budget, the government has failed to carry out the same.

Associations such as the All Pakistan Textile Mills Association (APTMA), Pakistan Yarn Merchants Association (PYMA) and Pakistan Cotton Ginners Association (PCGA), have expressed disappointment on government's failure to provide relief to these sectors.

According to spokesperson, for all the above bodies, Shakeel Ahmad, PM Gilani had promised APTMA, PYMA and PCGA, during a meeting, to bring about a solution for their problems.

Following multiparty meeting of these bodies, letters have been sent to the PM, the Textile Minister, Rana Farooq, National Assembly Standing Committee on Textile and the State Minister on Finance, Hina Rabbani Khar, to rethink on the promises, which were made during the PM's meet with the associations.

As per the meeting with the PM, it was decided that the Regulatory Duty imposition on yarn exports would be reduced to 7 to 8 percent from the current 15 percent and for the 2010-11 financial year, the Textile Committee would further reduce it to 5 percent, informed Ahmad.

More so, during the meeting, it was also discussed that, the Withholding Tax (WHT) will not be increased, but in the federal budget declared for 2010-11, the Finance Minister has announced a surge of 1 percent to settle WHT at 5 percent. This kind of a complete u-turn from the promises made was not expected by the association, averred Ahmad.

Following the imposition of 15 percent Regulatory Duty on exports of yarn, the global cost of yarn floated between 83-84 cents per pound. But with a rise of WHT, yarn prices are likely to come in a range of 96-97 cents per pound in the global markets.

Ahmad added that, at this rate, it would be difficult for the Pakistani yarn exporters to continue with the overseas sales of yarn, as their global price uniformity has vanished.

To this adds, Shabir Ahmed, Chairman, Pakistan Bedwear Exporters Association (PBEA), that, it was for the first time, that the federal budget was declared without any incentives for the sectors to promote exports.

More so, the growing number of unemployment amongst youth is also in danger, as the budget lacks incentives for industrialization and promotion of business actions in the country.

Fibre2Fashion News Desk - India


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