FAISALABAD - Pakistan Textile Exporters Association (PTEA) has expressed grave concern over non-release of funds for payment of incentives announced under the prime minister’s package.

In a statement issued here on Tuesday, the PTEA chairman said that only Rs4 billion were earmarked out of Rs180 billion PM’s export package. Moreover, sales tax and custom rebate refund claims of Rs200 billion are creating serious liquidity crunch for the textile industry and resulting in ultimate decline in the exports, he added.

He said textile industry, which contributes 8 percent of national GDP, remained a low priority area for the policy makers and the sector has not been given deserving importance. Resultantly, a negative growth of 1.63 percent has been witnessed in exports during July to June 2016-17 as compared to previous year which reflects non-seriousness of the government towards the largest manufacturing industry. Giving a comparison of textile exports under the prime minister’s export package, he elaborated that during first half (July-December) of outgoing fiscal, textile exports were $6.156 billion; whereas after announcement of PM's export package, textile exports during second half (January-June) remained $6.295 billion with an increase of 2.26 percent only.

Results show that release of insufficient funds for the incentives restricts the required growth, he claimed. Highlighting the core issue of severe liquidity crunch for textile exporters, the PTEA chairman said that Finance Minister Ishaq Dar had announced, while delivering budget speech, that all pending sales tax refunds whom Refund Payment Orders (RPOs) have been sanctioned by April 30, 2017 shall be refund till August 14, 2017. Despite making payment, a large number of RPO’s have been rolled back considering unnecessary objections. Initially, it was promised that rolled back RPO’s will be processed within 30 days but even after lapse of four months, the matter is still unresolved and textile exporters are still deprived of their basic working capital, he added.

Referring to the previous budget speeches, he said that the finance minister each time made announcement for payment of outstanding refunds of exporters but no funds were released and situation remained unresolved. In Budget 2014-15, Rs6 billion were allocated under textile policy but only Rs4.84 billion released. Likewise, in 2015-16 budget, Rs6 billion were allocated and in 2016-17 another Rs6 billion were allocated but were never released.

PTEA’s Vice Chairman Muhammad Naeem was of the view that due to delays in payment of refunds, the problems of exporters have been multiplied. No practical steps and measures have been taken to decrease the manufacturing cost. Higher production cost, delays in refunds and higher energy tariffs are the main reasons of drop in exports, he added. He stressed for immediate payment of all outstanding refunds as undue delay in release of huge funds that runs into billions had triggered serious liquidity crunch for cash starved textile exporters and manufacturers that lead to reduction of industrial activities.

The government should pay all outstanding refunds in accordance with its commitments. He demanded the government for immediate release of budget allocation for payment of duty drawback of taxes claims under the prime minister’s package to give a quantum jump in textile exports.