The textile export industry has appreciated the government’s decision to release Rs 65 billion for payment of all verified pending refunds up to March 3, 2024.
This positive move by the Prime Minister is expected to boost the confidence of exporters and stimulate the export sector.
On Tuesday, Pakistan Textile Exporters Association Chief Patron Khurram Mukhtar congratulated Prime Minister Mian Muhammad Shahbaz Sharif.
He emphasized the importance of prioritizing measures to support the economy and said that Pakistan’s progress depended on reviving its ailing economy.
Mukhtar expressed appreciation for the release of Rs 65 billion for pending refunds and hoped for a similar approach in settling the remaining refunds related to deferred sales tax, DDT/DLTL, TUF and subsidy surcharges.
Currently, Rs 50 billion is pending payment with the State Bank of Pakistan for DDT, TUF and surcharge subsidy, while around Rs 250 billion is held with the Federal Board of Revenue for deferred sales tax, income tax, income tax credit and duty refund.
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Mukhtar highlighted the adverse impact of high interest rates on industrialization and called for urgent measures to mitigate the cost of setting up new industries. Current economic growth, especially in the industrial sector, faces significant setbacks.
Mukhtar attributed part of this decline to the inhibitory effects of high interest rates on investment, particularly in the industrial sector. He pointed out that due to severe economic challenges, considerable textile capacity has become non-functional.
Without a rehabilitation mechanism, investments worth billions of rupees turn into scrap. Mukhtar urged the new government to formulate a comprehensive policy to bring the dormant units into operation, potentially generating an additional US$1.5 billion in valuable forex and creating more than 200,000 new jobs.
The textile industry plays a vital role in the economy, contributing 60 percent to the country’s exports and 8.5 percent to GDP.
Mukhtar claimed he had the infrastructure and capacity to double exports if the impediments to growth were removed.
Mukhtar stressed the urgent need to increase exports to reduce the widening trade deficit, which reached $30.18 billion during the July-February period of the current fiscal year. He emphasized the necessity of developing a methodology for discovering new markets and increasing the volume of exports.
The textile industry is currently unable to realize its potential due to high production costs and competitiveness issues. Mukhtar called for a pragmatic policy developed in consultation with stakeholders to reduce production costs and create a level playing field.
Mukhtar expressed high hopes for the industry’s prospects and highlighted the country’s long-term need for serious and talented leadership to address the challenges and kick-start economic recovery.
He advocated a shift towards value addition in the textile industry, stressing that sustainable growth depends on it.
Mukhtar urged the new leadership to develop a comprehensive action plan for economic recovery and export growth, and expressed hope that the new government’s economic managers would formulate pragmatic policies for sustainable economic growth.
