New textile policy for Pakistan

The first ever Textile Policy 2009-14 was announced by the Federal Minister of Textile Industry Rana Farooq Saeed Khan on Wednesday. The policy sets an ambitious target of achieving $ 25 billion over the next 5 years as compared to exports of $ 9.6 billion achieved during last fiscal year.

The policy is really a broad based document which encompasses areas like technology up gradation, infrastructure development, skill development, etc. and addresses rationalization of fiscal measures for the ailing textile industry along with removal of regulatory bottlenecks.

The government has for the first time, addressed all sub sectors of this industry separately with special emphasis on the value added sectors.

The policy provides many measures to address the falling trend of textile exports, but the most notable are as under:

Tiered drawback scheme with maximum benefit to the value added sub sectors.
Full refund of past R&D Claims

The availability of export refinance at 5%.

Priority in gas and electricity load management.

Relief on existing long term loans.

Zero rating of exports.

Tax free import of machinery.

Although the textile policy is a very comprehensive one and covers almost all the relevant areas of the textile industry like skills development, market support, zero rating of exports, incentives for employment of women and disabled persons, etc. but the government will have to devise a proper SOP framework in order to implement and monitor policies which are contained in the policy. It is really advisable that the government should consider a fast and transparent procedure for the disbursement of funds allocated for various programs. By breaking the overall target of $ 25 billion into intermediate yearly targets will also help the industry in monitoring its own progress. Only timely government decisions will make this policy meaningful and any delay in framework formulation will make this policy ineffective.

Textile Policy 2009-14 is certainly a welcome initiative taken by the government. This policy seeks to revive the ailing textile sector through some key immediate measures and sets a vision for transforming the present textile industry into a new era. The policy looks at the industry from almost every perspective and identifies key areas where investment can bring about fruitful results.

Now that the policy has been unveiled, hard work follows. The government now needs to set its priorities and bring about a framework which will give practical meaning to this policy. Needless to say that this framework should be formulated ASAP, keeping in view that it should be transparent, works fast and should be meaningful to the industry.

By presenting this policy, the government has also recognized that only textile sector can be an engine for rapid growth for Pakistan's economy. If this policy is properly implemented and if due market access is provided, Pakistan's textile industry certainly has the capacity to bring about rapid progress and prosperity which may not be limited to industrial areas only and which may easily spill into the remote areas where progress is really needed.