Ministry of finance has released only Rs1 billion to ministry of textile out of total Rs7.5 billion allocated for current fiscal year under Textile Policy 2009-14, for disbursement through State Bank of Pakistan (SBP). Ministry of textile requires Rs2.5 billion to pay off the claims of textile exporters under ‘The Duty Drawback Scheme’ for which secretary textile, Shahid Rashid took the matter to finance minister, Dr Abdul Hafeez Shaikh, documents available with Profit reveal. To compensate value added textiles exports and to offset the cost imposed on exporters, by a variety of government agencies, and disruption caused by law and order problems; ministry of textile took up the initiative of duty drawback of all sorts of local levies and on tax paid by the exporters. It is pertinent to mention here that the scheme was operational since September 2009, during fiscal year 2009-10 and 2010-11. Funds amounting to Rs7.40 billion have been disbursed under this scheme during the last three years. This scheme was terminated in June 2011 and 100 per cent of the claims pertaining to September 2009 to September 2010 have been paid whereas, 14.68 per cent of the claims pertaining to June 2010 to January 2011 have been paid.
Currently, total outstanding amount of duty drawback claims till June 30, 2011 amounted to Rs10.70 billion. Whereas, finance division has only allocated Rs7.5 billion for this scheme and released only Rs1 billion so far which has been creating problems in textile exports, officials explained. Moreover, textile ministry officials told that according to cotton crop assessment committee, before rains and flood in Sindh and Punjab, cotton crop was cultivated on 0.65 million hectares in Sindh and 2.5 million hectares in Punjab. However, recent rains and floods in Sindh damaged over 50 thousand hectares of crop which makes more than 75 per cent of the cotton cultivated in the province.
