Minister for Commerce and Textile Pervaiz Malik on Tuesday said that the government has taken a number of steps to increase exports of the country, which may help decrease the trade deficit in coming months. Responding to a question in the Senate during the question hour, the minister said that the trade deficit remained at 20.18 per cent during the period from July 2016 to February 2017 which was 15.04 per cent during the same period in 2015-16.
Referring to the steps being taken to decrease the trade deficit, he said that the Prime Minister has announced the trade enhancement package of Rs 180 billion. The salient features of the package included zero rating of machinery imports, withdrawal of duty and sales tax on cotton import, withdrawal of duty on import of MMF, release of pending liabilities of textile policies, release of pending sales tax refunds, drawback of taxes for the export sectors cascaded in terms of value addition.
He further said that under Strategic Trade Policy Framework (STPF) 2015-18, a total of Rs 20 billion will be spent on the development of the export sector over the next three years. The initiatives inter alia include technology up-gradation, an incentive for technology up-gradation in the shape of investment support of 20 percent and mark-up support of 50 percent up to a maximum of Rs 1 million per annum per company for import of new plant and machinery. Other measures included product development, branding and certification development support, and drawback for local taxes and levies (DLTL), he added.
Referring to the short-term export enhancement measures, he said that under short-term export enhancement measures, the four product categories ie Basmati rice, horticulture, meat and meat products, and jewellery are being focused with the parallel focus on the following markets of Iran, Afghanistan, China and European Union.
He said that an additional amount of Rs 6 billion is available this fiscal year to exporters through Textile Policy 2014. He said that the sales tax zero-rating regime for five export oriented sectors, ie textile, leather, carpets, surgical and sports goods has been introduced with effect from July 1, 2016. In order to counter the import surge through unfair trade and strengthen trade defence mechanisms, he said that National Tariff Commission Act has been revamped and approved by the Parliament in 2015.
In order to promote exports to new markets, he said that Trade Development Authority of Pakistan is undertaking various export promotional activities through trade exhibitions and delegations. He further said that the availability of affordable finance for the export sector has considerably improved while the State Bank of Pakistan has further reduced the discount rate to 5.75 percent. Similarly, he added, the export finance rate is currently at 3.5 percent, which is the lowest in a decade.
He said that the ministry is undertaking consistent efforts for getting additional market access for Pakistani products in the potential markets. In this regard, he said that FTA negotiations with Turkey and Thailand are at an advanced stage, negotiations with Iran on FTA are being initiated, and joint research study to assess the potential for a preferential arrangement with Korea is underway.
He said that due to the measures, the rate of decline in Pakistan's exports has decreased from 12 percent in 2015-16 to 3.9 percent in July-February 2016-17. The exports have already showing signs of recovery and it is expected that it would further improve by June 2018, he added.
Meanwhile, Minister In-charge of the Establishment Division told the House that there are a total of 3,193 federal government servants whose spouses have foreign nationalities and of them 68 civil servants are in grades from BPS-17 to BPS-22.
Copyright Business Recorder, 2017