The bank will provide liquidity to exporters and its authorised capital will be Rs 100 billion while the initial paid-up capital will be Rs 10 billion, Dastgir said, adding that the legal framework for the establishment of the bank would be developed through an Act of parliament.
He said the government has proposed Exports Refinance Facility (ERF) and through the State Bank of Pakistan has arranged to reduce its mark-up rate on exports finance from 9.4 percent to 7.5 percent, which would bring it in line with such rate prevailing in the countries competing with Pakistan which will reduce the financial cost of exporters by 2 percent.
He said the government has proposed the Long Term Finance Facility and through the State Bank of Pakistan has arranged to reduce its mark-up rate on long term financing facility for 3-10 years from around 11.4 percent to 9 percent effective from 1st July 2014, which will reduce financial cost of exporters by 2.4 percent.
The government is also making efforts to remove anti-exports bias in imports and a tariff rationalisation programme, being announced in the budget 2014-15 will gradually remove the anti-export bias in the country's tariff policy and make exports more competitive. The minister further said the government has decided to revitalise the Export Development Fund (EDF). The EDF was established through the contributions of exporters for the promotion of exports. However, over the years projects undertaken with the Fund's resources were not entirely helpful to exports. The EDF Board has been reconstituted and its organisation is overhauled with a view to making it more responsive and effective for the benefit of exporters.
Replying to a question, the minister said that Rs 20 billion of the Fund is current outstanding against the finance ministry and efforts would be made to resolve the issue in the current year. About corruptions in Trade Development Authority of Pakistan (TDAP), the minister said that re-organisation and reforms are being directed in this regard while internal audit is being launched. Dastgir said it has also been decided to set up Pakistan Land Port Authority to transform land ports into efficient facilitators of trade while being responsive to risks such as security issues, smuggling and human trafficking.
This measure will help Pakistan increase its exports through the overland route where numerous opportunities are offered by regional countries and connectivity to northern and western corridors. He further said that land port would be set up at Wagha, Torkham, Chaman and Taftan.
Replying to a question, the minister said that liberalisation and regional trade will boost the economy and Pakistan trade in India is in favour of Pakistan, adding that trade negotiations with India are expected to resume in next few months with India. The minister said that PTAs and FTAs were accorded without any homework and these needs to be reviewed, however, the government can not revoke them.
The minister said the government has announced several measures in the budget for textile sector to promote exports, which account for more than half of the country's exports. Its performance has been affected due to poor crops, delays in introduction of quality seeds and regulatory approvals for introduction of BT cotton, widespread energy shortages, numerous local taxes and levies, high cost of finance and restricted trade regimes adopted by importing countries.
He said in the past more focus was kept on raw materials exports while the value added sector was neglected however now government is incentivising this sector to promote exports which would result in earning foreign exchange earnings besides creating thousands of job opportunities.
He said the government has proposed draw-back for local taxes and levies to be given to exporters of textile products on FOB values of their enhanced exports if increased beyond 10% (over last year's exports) at the rates, 4 percent on garments, 2 percent on made ups and one percent on processed fabric. Textile sector enjoyed duty free import of machinery under textile policy 2009-14. This facility will end on 30th June 2014, however to take full advantage of GSP plus facility, this concession would be allowed for another two years. Abbas Khan said a new vocational training programme will be launched to train 120,000 men and women, over the five-year period, for skills required in the textile sector, especially in the value added sector such as garments and made-ups. The Federal Board of Revenue has been directed to clear all the outstanding sales tax refund cases by September 30, 2014, he added. The minister said that new Textile Policy (2014-19) would be announced next month.