Analysing the overall economy of Pakistan, he said that our foreign exchange earnings are restricted to foreign remittances and textile exports. He said that textile is much more important as compared to the remittances. "The textile sector also plays an instrumental role in providing much needed jobs to the unemployed youth in addition to fetching precious foreign exchange", he added. He said that unluckily for the last 12 years, this sector has been totally ignored by the governments and now its impacts are visible in the form of declining exports. He said that the foreign exchange earned by textile exports has been dwindled from 18-20 to 14-15 billion dollars.
He also criticised the so called zero rating of textile exports and said that government is still charging 17 percent sales tax on raw material consumed by this sector for the purpose of exports. He further said that sales tax and income tax refunds are still pending for the last many years. Moreover, in the garb of zero rating 1.5 to 2 percent non-refundable tax has been imposed whereas the income from exports is not equivalent to this tax. He said that earlier the tax paid was refundable though with a delay of many years but now this 2 percent tax is totally un-refundable which has added burden on exporters in addition to enhancing their cost of production and eroding their financial base.
He further told that textile sector is facing multiple challenges in the form of costly electricity and gas. The Pakistani exporters are getting electricity at 10 to 12 cent per unit while the same electricity is available in India at 4 to 5 cent per unit. He said that it is miracle that despite of these odds, the textile sector is surviving only due to the resilience and commitment of our entrepreneurs.
He said that FCCI has been highlighting these issues at all forums but still these have to be resolved. He said that government should make the exports a profitable business as at present it has lost its profitability. He also stressed the need to revive the sick textile units which are our national asset and could also add to our GDP.
SVP, FCCI Rana Sikandar Azam welcomed the holding of seminar by SMEDA and said that more seminars on important issues should also be arranged for the convenience and benefit of the business community. Engineer Ahmad Hasan VP, FCCI told that FCCI and SMEDA have inked a MoU under which at least 12 clusters of industries have been created to improve their productivity as well as quality. He said that R&D department of FCCI has also been reactivated to critically analyse the core economic issues and recommend proper steps to improve the overall economy. He told that we should follow the economies of countries like Vietnam and Thailand who have given a quantum jump to their economy within a short span of a few years. He said that basically Pakistan is and agriculture country but we are still revolving around the production of raw material and no serious efforts have been made for value addition.
He said that through value addition in dairy sector alone we could earn billions of rupees but for this purpose government has to play its role in policy making and facilitation to the concerned sector. He also responded to questions and queries asked by the participants of this seminar and advise them to identify their sector specific issues with viable recommendations to solve the same. Later, President FCCI Engineer Muhammad Saeed Sheikh distributed certificates among the participants of the seminar while the experts including Bilal Afzal delivered lectures on production and operation management.