FAISALABAD - Pakistan Textile Exporters Association Chairman Ajmal Farooq has said that the prime minister's export package would prove ineffective in boosting exports as extreme cash flow crunch is gradually eroding the biggest job providing textile export sector.

In a statement here on Monday, he said that textile exporters are badly deprived of liquidity as major portion of their working capital has been blocked in refund cycle and under such extreme financial stress it seems impossible to achieve target of enhancing the country's export by 2 to 3 billion by June 2018.

He said the Prime Minister's Trade Enhancement Initiatives is a right move but inadequate funding would result in failure of getting desired results. Giving example, he said that due to short releases of funds, half of the incentives of Textile Policy (2009-14) are still yet to be disbursed. Giving details, he said that claims of Rs10,300 million are still outstanding against export finance mark-up support, Rs1,500 million against Mark-up Rate Support, Rs19,405 million against Technology Up-gradation Fund Rs7,431 million are outstanding against Drawback of Taxes & Levies (DLTL).

Moreover, a huge amount of claims of incentive schemes under existing textile policy (2014-19) are also unpaid. Terming funds blockage as major cause of continuous drop in exports, he said that textile industry is unable to tap its potential in accordance with capacity. The government should speed up the process of paying out billions of rupees outstanding tax refunds to get maximum industrial growth and significant increase in exports, he demanded.

PTEA's Group Leader Ahmad Kamal was of the view that export industry is the life line of economy and continuous drop in exports would spell an amount of trouble for the economy, especially considering that the trade deficit is continuing to widen. Giving details, he said that the country's trade deficit has widened to a record high of $20.2 billion during the eight months of the ongoing fiscal year with $5.2 billion higher than the deficit recorded in the comparative period of the previous year. The ballooning deficit may expose vulnerabilities of economy as financing such a huge gap in the midst of falling exports and stagnant foreign investment has become a challenge. This will increase more reliance on expensive foreign borrowings, he added. Stuck up liquidity in refund cycle has caused major dent to the country's exports. The government should set its priorities right and accord preferential treatment to boost the exports and generate industrial growth, he demanded.

Expressing concern over disparity with Punjab industries in gas prices, he said that gas rates are almost 100 percent higher than those paid by the industries in other provinces. Pressing for uniform gas prices across the country, he said that industries in Punjab are bearing additional burden of Rs100 billion annually on account of gas price differential as compared to the industries in other provinces.

PTEA Vice Chairman Naeem termed value-added textile sector as the backbone of the economy with great potential for earning foreign exchange but around 54 percent of the country's exports and 42 percent employment is heading towards disaster because of declining trend in the exports. He urged the government to take stock of the situation and boost the exports of the country by addressing the liquidity issues through immediate payment of stuck up amounts in refund regime.