ISLAMABAD - After approving sixth budget from the National Assembly, the PML-N government is now working on an incentives package to boost country’s exports, which would be announced before completion of the government’s tenure ending on May 31.

The government had already said that it would not announce the Strategic Trade Policy Framework (STPF) for next five years and left the matter for the next government. The previous STPF 2016-18 would expire on June 30 this year.  However, the government is announcing an incentives package for the exporters, which is likely to win their support before the general elections.

Finance Minister Miftah Isamil, in his windup budget speech, announced to extend the Export Incentives Package beyond June 2018. He said that Rs24 billion have been set aside for the next package in the budget and, if required, more funds will be arranged through supplementary grants. An incentives package worth Rs180 billion, announced by former Prime Minister Nawaz Sharif, would expire after June 30, 2018. Under the package, the new duty drawback rates for textile garments will be 7pc; textile made-ups 6pc; processed fabric 5pc; yarn and grey fabric 4pc; while sports goods, leather and footwear will be taxed at 7pc.

Sources said that government may retain the reduced duties on textile goods in the incentives package. Similarly, it could also announce incentives as agreed with the All Pakistan Textile Mills Association (Aptma) regarding reducing power tariff. The Aptma last week held meetings with Finance Minister Dr Miftah Ismail and National Assembly Speaker Sardar Ayaz Sadiq to seek incentives for the textile sector. The government had agreed with Aptma to reduce the electricity price by Rs 3 per unit and provide enhanced supply of natural gas to the textile sector to increase exports. However, the government said that Economic Coordination Commission (ECC) of the Cabinet would give approval to it.

The Strategic Trade Policy Framework 2016-18 had failed to enhance the exports. Pakistan is all set to miss its over-ambitious exports target of $35 billion by June 2018, which was set in the three-year Strategic Trade Policy Framework 2016-18. Pakistan's exports would touch $24 billion during ongoing fiscal year as against $20 billion of the previous year. Exports are now increasing due to the initiatives by the government to provide duty drawback as well as the exchange range adjustments have contributed positively to the growth. Improved market access especially in the European market owing to the successful review of GSP Plus facility also played an important role. Similarly, the government had recently allowed rupee depreciation against the US dollar, which helped in enhancing exports.