PM unveils Rs180b package to boost exports

PM unveils Rs180b package to boost exports
ISLAMABAD – Prime Minister Nawaz Sharif on Tuesday unveiled a “Trade Enhancement Initiative” worth Rs180 billion to shore up country’s declining exports.”The package will strengthen the country’s economy as exports will increase. The package will help in ending poverty, illiteracy and backwardness and generating employment opportunities in the country,” the prime minister said while addressing a function after holding a meeting with his economic team and representatives of exporters.
Under the package, duty drawback for garments would be 7 percent, textile made-ups 6 percent, processed fabric 5 percent, yarn and grey fabric 4 percent, sports goods, leather and footwear 7 percent and carpets and tents 5 percent. Similarly, the government abolished import duty on cotton and also abolished customs duty on man-made fibre other than polyester and sales tax on import of textile machinery has also been eliminated.Later, briefing the media about the package, Commerce Minister Khurram Dastgir said that the scheme would continue for 18 months starting from January 2017 to June 2018. “There will be no condition on getting duty drawback in the first six months (January to June) under the scheme. However, exporters will have to record 10 percent growth in exports during the next fiscal year 2017-18 as compared to the ongoing financial year,” he said.
He said that the government has offered a historic package to enhance the exports, which would cost Rs180 billion. The minister said that the package would generate employment opportunities and revive sick factories in the country. He said that the package would enhance the country’s exports by $2.5 to $3 billion by the end of June 2019. “Prior to the incentives package, the government had already reduced power tariff for industries from Rs15/16 per unit to Rs11 per unit. Similarly, the government was providing uninterrupted power supply to the industries in the country,” he added.
The minister said that the government had already given zero-rated facility to five export sectors in the budget. “The government would give the duty drawback facility through the State Bank of Pakistan (SBP).”
Addressing the function, the prime minister criticized previous governments for not taking steps for the development of the country. He said that the country’s economy was currently stable and continue to rise due to the hard work of the economic team of the government as the country was on the ebb of default in 2013.
Talking about the power situation, PM Nawaz said that the government would add 10,000 megawatt electricity to the national grid by 2018 which would help resolve the power crisis. “The government would not only eliminate power load shedding but also reduce the tariff,” he said adding that the government was releasing funds for production cheap electricity as Rs110 billion had already been allocated for the acquisition of land for Diamer-Bhasha Dam. “Dozens of power plants are being installed under the China-Pakistan Economic Corridor project and many others are being financed by the government.”
The prime minister said that Pakistan Railways was also being revamped and upgraded with an investment of $8 billion dollar. He said that the improvement plan envisages doubling the speed and halving the distance between Karachi and Peshawar. The prime minister said that a network of roads, highways and motorways was being laid at a cost of Rs1 trillion integrating different regions of the country.
Sharing economic achievements, the prime minister said that the government had reduced the budget deficit to 4.6 percent of the GDP, bridged inflation and stock exchange index was on record high.
Finance Minister Ishaq Dar said that the government had already taken several measures in the budget for enhancing exports that included zero-rated for five export sectors and clearing tax refunds of the exporters. He said that the government had also reduced the power tariffs and announced a package for the agriculture sector.
He said that the exporters should enhance the country’s exports to 10 percent of the GDP (around $32 billion) to find a place among the emerging markets.
Federation of Pakistan Chambers of Commerce and Industry President Zubair Tufail also hoped that exports would increase in 2017. The All Pakistan Textile Mills Association (APTMA) also welcomed the package.
It is pertinent to mention here that the country’s exports were in decline despite of getting a GDP-plus status from the European Union in January 2014. Latest figures of Pakistan Bureau of Statistics (PBS) showed that the country’s exports recorded at $9.9 billion during the first half (July-December) of the year 2016-17 against $10.3 billion of the same period of the previous year showing a decline of 3.82 percent.

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