A meeting of the National Assembly's Finance Committee presided over by Qaiser Ahmed Sheikh got an in-depth briefing from textile exporters on factors behind shrinking exports to $20.4 billion from over $25 billion during the last four years. The meeting after hearing out the stakeholders and members of the committee decided to convene a joint meeting of three ministries involved in exports as well as implementation of Prime Minister's incentive package for exports, and directed the ministries to ensure presence of the ministers in the committee meeting.
President Sialkot Chamber of Commerce and Industry (SCCI) Majid Bhutta and Chairman Bedwear Association Azhar Majeed stated that exports are below $20 billion and added that "we start exports with 25 percent disadvantage due to 12.5 percent overvalued rupee and 12.5 percent subsidy provided by other countries to their exporters." The government has released hardly Rs 1 billion out of Rs 180 billion from Prime Minister's incentive package for exports against the local taxes, they maintained.
The chairman Bedwear Association stated, "Rs 180 billion incentive package was against local taxes that can not be exported to other countries," claiming that there are Rs 200 billion sales tax refunds of three to five years are with the tax authorities. As a result exporters have been facing serious liquidity problem. Of Rs 200 billion, he added, "Rs 160 billion have been pending with RTOs for the last three to five years."
Majeed added that many textile units have been closed in Faisalabad whose revival could increase exports by $2-3 billion and generate employment as well. Previous governor State Bank of Pakistan had agreed on restructuring of their loans, however, there was no progress in this regard during the last one year.
Committee member Asad Umar said a number of surcharges on electricity and gas as well as an overvalued rupee are some of the factors making the country's exports expensive in the international market. He said that as long as these fundamental problems are not solved, the revival of exports would be a formidable challenge.
A joint secretary of the Commerce Ministry said that ministry is working on a proposal to de-link the condition of incremental increase in exports for payment of rebate. The Commerce Ministry is taking up the matter within the government to do away with the condition while Parliamentary Secretary Finance Rana Afzal stated there was an agreement with the exporters that a 10 percent increase in exports would provide them a rebate of 6 percent. "We will pay them rebate from the increase in exports and if exports are not increased, how the government would pay them rebate," added the parliamentary secretary.
Meanwhile, the committee directed that FBR and SBP high-ups should hold talks with the president Sialkot Chamber to resolve the problems of exporters. A representative of the State Bank of Pakistan (SBP) stated that a probe report into rupee depreciation against the dollar would be completed by July 31, 2017. Asad Umar remarked that Deputy Governor, the then acting governor SBP, was most upright, honest and thoroughly gentleman and wanted the committee to place his words about him on the record.
The committee approved the Microfinance Institutions (Amendment) Bill, 2017 and directed the SBP for proper advertisement of ongoing loan schemes, already launched by the government, for disabled persons. The committee considered the Investment Corporation of Pakistan (Repeal) Bill, 2017 and recommended that it may be passed by the National Assembly as reported by the committee.
The committee also discussed the issues regarding Pakistan steel sector and asked the FBR for solving the problem facing the sector. Member of the committee Abdul Mannan stated that the government has decided to disband the EDB due to its poor performance.
Copyright Business Recorder, 2017