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PEW says textile sector needs more incentives
11 Jul '16
2 min read
The Pakistan Economy Watch (PEW) has hailed the government's move to provide zero-rating tax regime for the textile sector but termed it insufficient in the current scenario.
In a statement issued, PEW President Dr Murtaza Mughal asked the government for more relaxations so that Pakistan could regain its position in the international market.
“The $14 billion textile industry which is playing a critical role in the national economy is crumbling due to multiple reasons, which warrant immediate government intervention,” he said.
He said that energy crisis, incoherent policies, regional competition, undue taxation etc.
had taken a toll on this industry that provided jobs to 3.5 million people.
He said that 57 per cent exports were linked to textile industry; its share in manufacturing was 46 per cent while it employed 38 per cent of the urban labour.
Mughal said that share of textile in the GDP was 9 per cent which would shrink creating problems for everyone, including tens of millions of farmers who depend on cotton crop, he added.
"Other countries are providing subsidies to their textile sector and frequently devalue currency to get a foothold in international market which has left local sector unattractive for investors," he said.
He also urged the government to review exchange and monetary policy and refund mechanism as textile sector was awaiting refunds worth rupees 1.10 trillion for a long time resulting in severe liquidity problems.
Mughal ended on an ominous note, warning that “around 33 per cent textile mills had been closed depriving one million people of their jobs and if the situation remained unchanged more bad news would follow.” (SH)
In a statement issued, PEW President Dr Murtaza Mughal asked the government for more relaxations so that Pakistan could regain its position in the international market.
“The $14 billion textile industry which is playing a critical role in the national economy is crumbling due to multiple reasons, which warrant immediate government intervention,” he said.
He said that energy crisis, incoherent policies, regional competition, undue taxation etc.
had taken a toll on this industry that provided jobs to 3.5 million people.
He said that 57 per cent exports were linked to textile industry; its share in manufacturing was 46 per cent while it employed 38 per cent of the urban labour.
Mughal said that share of textile in the GDP was 9 per cent which would shrink creating problems for everyone, including tens of millions of farmers who depend on cotton crop, he added.
"Other countries are providing subsidies to their textile sector and frequently devalue currency to get a foothold in international market which has left local sector unattractive for investors," he said.
He also urged the government to review exchange and monetary policy and refund mechanism as textile sector was awaiting refunds worth rupees 1.10 trillion for a long time resulting in severe liquidity problems.
Mughal ended on an ominous note, warning that “around 33 per cent textile mills had been closed depriving one million people of their jobs and if the situation remained unchanged more bad news would follow.” (SH)
Fibre2Fashion News Desk – India
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