ISLAMABAD: As the Ministry of Commerce has recently complained about technological advancement and up gradation on the part of exporters in textile sector resulting in fast losing competitiveness in international markets, hosiery exporters have demanded refunds worth Rs 42.5 billion as committed by the government under the head of Technology Up-gradation Fund (TUF) Scheme.
In his recent visit to Karachi, Secretary Commerce Younus Dagha had claimed that textile industry was itself responsible for the continuous decline in exports because it has ignored innovation. During his visit to Pakistan Hosiery Manufacturers Association (PHMA) House, Dagha said, “with this attitude, you (the textile industry) cannot compete with Bangladesh and India that have increased their exports despite challenges.”
After such comments, PHMA, through a letter to Prime Minister Shahid Khaqan Abbasi, has demanded the Rs 42.5 billion worth refunds committed by the government under its textile policy 2009-14.
“We invite your kind attention towards TUF scheme that has been provided by the ministry of textile industry, to facilitate textile sector. They said the scheme aimed to improve the overall technological configuration of the sector; remove critical imbalances in the value chain; achieve compliance with international standards and increase overall investment through support with special provisions for supporting the SME Sector. Initially, TUF scheme was provided under textile policy 2009-2014 wide notification of ministry of textile industry on April 5, 2010, for the period Sep 1, 2009, to June 30, 2014, and allocated an amount of Rs 42.5 billion. SBP later issued procedures and instructions on Aug 30, 2012, announced after 2 years approximately and the deadline for submitting claims was August 31, 2015. Consequently, exporters had submitted their claims well in time to SBP for markup and investment support, hence physical inspections were conducted by ministry of textile Industry through representatives of National Textile University (NTU) and logistics expenses of representatives of NTU were borne by the respective exporters’ firms but still exporters have not received claim amounts as SBP is waiting for funds of TUF scheme under textile policy 2009-2014 to be released,” the letter a copy of which is available with Pakistan Today said.
After the announcement of TUF scheme and promises made by the government, exporters had made further heavy investments to upgrade their industrial units, nevertheless, the promises of the government have not yet been honoured and no amount under the said scheme has been paid to date. It was also noted with utmost surprise that the scheme completed on its specified time but funds were not released as per the commitment of the government.
Requesting the release committed funds under the scheme, PHMA coordinator Muhammad Jawed Bilwani said in-spite of the fact that the government had previously not released the funds for TUF scheme 2009-2014, a second TUF scheme was announced on October 3, 2016, for the period of July 1, 2016, to June 30, 2019, which mean that the exporters who invested to upgrade plant and machinery during July 1, 2014, to June 30, 2016, will be deprived of the scheme.
Moreover, the TUF scheme 2014-2019 still lacks the procedure to apply which was supposed to be formulated by the SBP and has not yet been issued after a lapse of almost one year.
According to him, previous TUF scheme announced in 2009 was provided for complete five years from 2009 to 2014 in accordance with the period of textile policy 2009-2014. However, the scheme announced in 2016 was announced for three year period only.
He requested the prime minister to issue directives to the ministry of textile industry to revise the period of application of TUF scheme under textile policy 2014-2019 and provide this support for complete five years from July 1, 2014, to June 30, 2019.
