NA speaker takes lead to bring textile industry out of woods

ISLAMABAD: In a rare development, custodian of the National Assembly Speaker Sardar Ayaz Sadiq has come forward to take lead for bringing out of woods the Punjab textile industry, mired in host of many chronic issues since long.

And to this effect he has invited all the representatives of textile associations in the Parliament wherein he will not only listen problems of Punjab textile industry but would also help resolve all the issues particularly pertaining to the cost of doing business.

“We all are going to the Parliament today (Thursday) to meet NA Speaker on his invitation and will sensitize the agonies textile sector is going through since long,” Ejaz Gohar, an eminent textile industrialist told The News.

He said that textile industry in Punjab is vanishing as most of it has closed down its all operations on account of high energy cost that has increased the cost of doing business in the province. “In the presence of high energy cost (RLNG cost at Rs1350 per mmbtu and electricity tariff at Rs12 per unit), it is not possible to continue the textile business in the country and enhance exports. The energy cost constitutes 35 percent of the total input cost making the textile products uncompetitive in the international market,” Mr Gohar argued.

About 150 mills, he said, in Punjab have already closed down owing to which in the last two years 500,000 people have lost their jobs.

Upset with the inputs’ high cost, he also pinpointed about Rs200 billions amount is stuck up with tax machinery and it is not willing to refund them triggering to the mammoth liquidity crisis for the industry. The beleaguered industry is keeping in view the worsening cost of doing business. “We are going to make NA Speaker aware about the plight of the industry and have input from them to make the industry sustainable.”

To a question he said that: “We are seeking the unified energy cost all over the country as Punjab industry is being provided the gas at Rs1350 per mmbtu whereas industry in Sindh and KPK is being supplied the gas at Rs600 per mmbtu and owing to this factor, the cost of doing business in Punjab has skyrocketed forcing the industry owners to close down their businesses.”

Pakistan’s growth of textile and clothing exports have declined by 10 percent during 2011-17 whereas Vietnam’s exports grew by 107 percent followed by 63 percent growth by Bangladesh, 31 percent by India and 20 percent by Sri Lanka. This shows that Pakistan’s performance stayed in negative zone during the stated period. He stressed upon arguing that Pakistan has lost the competitiveness due to the regionally non-competitive energy cost as gas to the textile industry in Bangladesh is being provided at the cost of $3 per mmbtu, Veitnam $4.2, India $4.5 and in Pakistan the product is being supplied at the cost of $11 per mmbtu.

As far as the electricity cost is concerned, the industrial tariff in Vietnam and India stands at 7 cents per unit followed by 9 cents in China and in Pakistan it stands at 11.50 cents per unit. He also mentioned that in Indian Punjab the electricity tariff for industry has been set at 5 cents per unit for next five years.

More importantly, Pakistan industry faces the highest taxation in the region, he mentioned saying that industry in our country is paying 38 percent corporate tax and 17 percent GST whereas in Sri Lanka industry pays 15 percent corporate tax and 15 percent GST. The industry in Bangladesh pays 25 percent corporate tax and 15 percent GST and in Vietnam it pays just 22 percent corporate tax and 10 percent GST.