FAISALABAD - Overall exports of Pakistan are heading towards total collapse; textile industry is the only hope for the revival of country’s economy which is currently jolted by the energy crises and liquidity crunch, said Pakistan Textile Exporters Association (PTEA) Chairman Asghar Ali.

Asghar Ali termed energy shortage and lack of finances the main reasons behind the prevailing decline. He elaborated that billions of rupees of textile exporters were stuck up on account of exporters’ refunds of Sales tax, duty drawback and DLTL refund regime with various government departments, creating liquidity crunch. He said that duty drawback (custom rebate) had not been paid over the last three years and refund claims over Rs2 billion are pending just with the Model Collectorate Faisalabad and about Rs14 to 15 billion of exporters has been blocked in the head of Sales tax claims. The exporters are paying 1% SED (Special Excise Duty) on their inputs; however the same is not being refunded to the exporters. The amount of pending refund claims comes to around Rs3 billion which is not being sanctioned to the exporters since 2007,” he pointed out, adding that a large number of refund claims of duty drawback on polyester filament yarn had been pending with Customs Model Collectorate Faisalabad since 2009.

He argued that Polyester Filament Yarn was an important alternate raw material/input in manufacturing of exportable textile goods. Duty drawback is admissible on Polyester Staple Fibre but Polyester Filament Yarn has been ignored,” he lamented and added that Polyester Staple Fibre and Polyester Filament Yarn both were products of Polyester.

The PTEA chairman said that Pakistani exports were already under pressure due to prevailing economic financial, industrial crisis in the country as well as persistent law and order situation and energy crisis which were badly affecting the industrial and trade activities, the productivity output and workers employment, he elaborated. Asghar Ali said that textile export sector was a major forex earning sector to the tune of ten billion dollar plus per year.

Textile exports of the country are crumbling and the industry and business have been squeezing due to non-availability of funds, he claimed. The PTEA chairman warned that with the closure of industry, poverty rate would increase and unemployed workforce would come out on roads, creating law and order situation. He also warned that with the collapse of industrial sector and drastic decline in Value added exports, precious forex and national revenues would be worst hit, shattering the national economy.

According to the official figures, Pakistan exported textile commodities worth $12.357 billion in July 2011-12 period as compared to $13.788 billion in the same period of the previous financial year. Meanwhile, textile exports also went down by 17.70 per cent during the month of June 2012 against the same month of last year. The country exported textile commodities worth $1.083 billion in June 2012 against $1.315 billion in June 2011 and It might be mentioned here that industrial sector of the country is facing worst kind of loadshedding (gas and electricity) from last few years, which is resulting in reduction in exports.

The PTEA leaders urged the government to plan a strategy to solve economic issues to meet the challenges of global world. They demanded immediate payment of blocked refunds to enhance textile exports.