ISLAMABAD: The Ministry of Finance believes that textile tycoons are unnecessarily pressurizing the government for another hefty subsidy package worth billions, pretending that the ruling elite cannot afford declining export trends in an election year.

“It is our conclusion that the textile tycoons are striving hard to exploit the situation and there is no justification for giving them another subsidy package amounting to Rs25 to Rs30 billion as prepared by the Motiwala committee,” a high-level official in the ministry said in a background interview here on Monday.

The official said a textile industry’s committee had prepared a financial package of Rs51 billion at the start of the current fiscal year. The government had announced a clutch of measures for providing Rs18 to Rs25 billion package after this year’s budget but textile tycoons were not satisfied and have been continuously endeavouring to obtain more.

“Now they want to achieve the whole package amounting to Rs 51 billion, as prepared by the Motiwala committee, which is without any justifications,” added the official. The government had announced zero rating regime for five major exporting sectors, including textile. Textile exporters also get rebates on provision of electricity and gas and there is no point in saying that utility prices are rendering them uncompetitive in the international market, the official argued.

The official said that they had not so far seen any formal summary from the Ministry of Textile for securing another package for this sector and when it would come before them, the ministry would sternly oppose it.

In terms of US dollars the exports during July-January 2006-2007 totalled $9.6 billion as against $9.27 billion during the corresponding period of last year, showing an increase of 3.86 percent. Overall exports in textile are on the decline, resulting in lower growth for exports during the current financial year.

Analyzing some other facts, the official said the textile sector is facing a tough competition from India, China and Bangladesh. Pakistan had already asked the World Bank to analyze whether New Delhi was providing its exporters a subsidy in order to marginalize exports potential of Pakistani made-ups.

There are also some other reports suggesting that textile exporters are using remittances as a tool for pocketing billions of rupees in order to pressurize the government for winning another package.

“There is need to change the mindset of the quota regime which the textile tycoons have possessed for generations,” said the official and added that in the wake of quota abolition the exporters are facing tough competition and now they cannot survive without becoming more efficient.

Citing examples, the official quoted textile exporters as saying that when all sectors could exploit the government for ensuring more benefits then why textile industry should be left behind despite knowing this fact that the country is heading towards the general elections and the government will not be able to refuse another hefty package for them.