It is not for the first time when the elite cadre of any trade has been facilitated while the lower cadre has once again been disregarded. This emerged after the meeting of the ministers’ committee held in Islamabad last Thursday, which brought cheers for the textile tycoons. The committee agreed to review the 68 per cent increase in gas prices for the captive power plants.
But the disappointed owners of small and medium size units supported by ten chambers of trade and industry from three provinces went on strike. They are also keeping up the pressure on the government to accept their demands.
Over 400,000 textile units from Faisalabad, the hub of textile industry, and other parts of Punjab are participating in the strike. Similarly over 20,000 textile small units of Sindh have threatened to go on strike if the demands of their representative bodies are not given a positive nod.
The demands of textile manufacturers and exporters include immediate abolition of 31 per cent exorbitant gas price-hike, levying 10 per cent withholding tax on electricity bills.
“Only two per cent large industrial groups and multi-national companies are utilizing captive power based on gas. Remaining 98 per cent industrial units all over the country particularly in Sindh and Karachi are utilizing gas as raw material,” a member of Karachi Chamber of Commerce and Industry said.
“Thirty one per cent increase in the gas prices has destroyed the existence of the domestic industry in general and textile industry in particular.”
A spokesman for the textile associations has clarified the situation regarding the recent gas price-hike for captive power plants. G.R. Arshad, former chairman, All Pakistan Textile Processing Mills Association (APTMA), told Pulse that overall industrial sector consisted of two slabs: captive power plants and general industrial consumers.
“The gas tariff for the captive power plants has been raised by 68 per cent while that of general industrial consumers has been enhanced by 31 per cent,” he informed.
“The captive plants are installed by private entrepreneurs after investing huge amounts in order to meet the acute shortage of electricity for value-added textile units engaged in dyeing, bleaching printing and processing, knitting, hosiery and towel manufacturing for whom gas had assumed status of a basic raw material.”
While APTMA seems to have been placated by the government on gas price issue for captive power plants, a very large chunk of textile industry remains agitated on the issue of 31 per cent rise in gas prices for general industrial consumption.
“APTMA represents the big business and it settles its issues with government on its terms after compromising on fundamentals of the industry at large,” Adil Mahmood, a leader of Lahore-based All Pakistan Textile Association (APTA), a breakaway group of APTMA said while talking with this scribe.
The Textile Association of Pakistan (TAP), another splinter group based in Karachi, issued a statement to declare that 31 per cent increase in gas price is adversely affecting those segments of textile industry in which gas is used as a vital input.
A TAP spokesman identified dyeing, processing and printing of woven knitwear towels as value-added sectors where gas is a key input and an abnormal rise in gas prices would impair the industry.
It is open to all that the real crunch for textile business is coming from 31 per cent increase in gas price for the industry.
“Instead of increasing 31 per cent price on gas, the government can generate resources by making some adjustments within overall tariff structure of the two gas distribution companies -- Sui Southern and Sui Northern -- and also by taking some hard decisions,” a former chairman of SITE Association which is closely engaged in resolution of current textile industry crisis, said.

“Our prime objective these days is to protect jobs in the industry, keep our presence in international export market and earn foreign exchange to finance our imports and improve our terms of international trade,” he argued.

Zubair Mootiwala, Chairman of Gas Committee of KCCI, called for withdrawal of gas price-hike, restoration of R&D support facility across the board without discrimination. “It is simply not possible for the industry to survive in the wake of huge rise in gas price, as it would escalate production cost of export goods and after inclusion of other hike, our exporters would not be able to compete in international market.”
To raise these issues, industrial circles apprised, a delegation of KCCI headed by its chief Shamim Ahmed Shamsi would be meeting Finance Minister Naveed Qamar in Islamabad in the coming days.
A big issue is lopsided distribution of R&D Refund to the exporters. Major share of the export is being taken up by medium and small scale exporters while the lion’s share has been granted to the big exporters.
“There are hardly 10 textile exporters who net in annually $100 million but about 12,000 medium and small exporters work day and night to earn more than $10 billion in a year,” a garment exporter from Karachi said. A general impression is that by accepting proposed mechanism for giving cash subsidy, the government will ignore small business.
Exporters complain that successive governments have depended a lot on a few big textile business houses and have not bothered much about the industry in general. Representatives of the same big business houses have been taken in the advisory councils and in advisory committees for inter- ministerial meetings.
Another bone of contention is the growing interest rates. The continuing growth in interest rates of the bank closing down the entire domestic industries during the last three years, profits of five big banks of the country has jumped to Rs116 billion, from Rs6 billion and all the domestic banks are giving a very tough time to the textile industry.
Textile exporters are of the view that industry should be saved from diminishing and export refinance be provided to the exporters as per their entitlement to let them survive.
And the last but not least is levying of 10 per cent withholding tax on electricity bills of power looms. The power looms representatives said withholding tax should be withdrawn immediately.
“Are we the only source of income for the government? Can’t it see share market, banking sector, real property business which are being flourished under unlawful tax exemptions,” they questioned.
All concerned associations including exporters, hosiery, textile processing, power looms and sizing have unanimously appealed to Prime Minister Yousuf Raza Gilani to take instant stock of the situation; otherwise be ready to see country’s economy ship drifting towards destruction.