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Commerce, textile ministries asks Dar to allow subsidy on exports

Commerce, textile ministries asks Dar to allow subsidy on exports

ISLAMABAD: Commerce and textile ministries have urged the Ministry of Finance to allow the continuation of an unconditional cash subsidy on exports in 2017-18 under the prime minister’s Rs180 billion support package.

“We have approached the finance ministry several times for a policy change,” an official source in the commerce ministry said.

The prime minister announced on Jan 11 a subsidy package of Rs180 billion to boost exports. The package promised the unconditional cash subsidy in the first six months (January-June). Exporters agreed to avail the same subsidy by achieving an incremental increase of 10 per cent in export proceeds in 2017-18.

Pakistan’s overall exports fell 1.63pc to $20.45 billion in 2016-17 from $20.78 billion in the preceding year.

Data shows that results of the premier’s export package in the first six months do not support the continuation of the unconditional cash subsidy in the current fiscal year.

According to the official source, the finance ministry has so far released Rs4.5 billion against claims submitted by exporters under the support package. Total submitted claims were of more than Rs15 billion, the official said, adding that the remaining amount would be released soon.

The finance ministry expects to receive claims in the range of Rs30 billion and Rs35 billion for the first six months of the package. The total amount of subsidy projected for the first six months was Rs60 billion. The government projected Rs120 billion in the cash subsidy for 2017-18.

The official source said exporters are not willing to honour their commitment about claiming the subsidy in the case of an incremental increase in export proceeds. “We are trying to convince the finance minister to change his policy and continue the package on the pattern of the first six months.”