Chapter#5
Conclusion & Recommendations
The chapter presents conclusions arrived on the basis of findings from the study
in accordance with the set objectives and hypothesis of the study. The chapter also
sheds light on the policy recommendations for the government and last but not the least
it also set a way forward for further research in the field to elaborate the issue in a more
comprehensive way.
5.1 Conclusions:
There is no other opinion amongst economists of the country that textile sector is
the backbone of the country’s economy. The study was conducted in the wake of
significance of textile sector in economy of the country especially its role in industrial
production. The study was performed with a view to explore potential of textile sector in
boosting overall growth of the economy. It was assumed that the sector is faced with
many challenges including electricity shortages, higher inflation and interest rate.
The main objectives of the study were to find out the relationship between input
and output of textile sector especially in the case of three variables that is electricity
supply, interest rate and cotton price. The study adopted multiple regression model to
find out the relationship between these variable taking over a time series data of 16
years.
On the basis of estimation, it was found that although there is a relation amongst
the variables, however, it is not as significant as it was perceived to be. This may be
attributed to the reason that some variable has been omitted for unknown reason or
inadvertently.
As far as the individual impact of independent variable i.e electricity supply,
interest rate and prices of raw cotton is concerned, it remained positive for the first two
while it remained negative for the latter. The results for electricity supply and raw cotton
is in line with the economic theory however, it is inconsistent in case of interest rate,
may be the institutional barrier to access of credit is mitigating the role of this variable.
5.2 Policy Recommendations:
Policy Recommendations: on the basis of findings of this study, it is
recommended that textile sector being the largest base of the industrial sector calls for
immediate attention of the government for facilitation in terms of special treatment in
form of concessional loans, ease of doing business, priority in terms of energy supply
and encouraging private sector to produce electricity in industrial areas.
The textile sector also seeks attention of policy makers to agriculture sector.
There is a need to put effort from government side for increase in domestic production
of cotton so that the basic input is readily available to the industry at cheaper cost as
this industry has to compete internationally bot in price and quality.
Furthermore, high cost of capital is also a hindering factor in increasing
production of textile products, the government need to provide concessional loans to
textile sector in order to boost this important sector of the economy. Last but not the
least institutional support in terms of providing credit, exploring markets across globe,
diversification of product as well as international market. In addition, government may
make a free textile governing body and address the problems with stakeholders
involved and associated with this important sector of the economy
5.3 Recommendation for Future Research:
As stated earlier the scope of the study was confined to analyze the impact of
only three variables on cloth production, however the same may be enhanced and other
variables like labour rate and working hours may be included in the model to estimate
the effect. The exchange rate and role of other international competitors may also be
examined.
A similar study can also be under taken with the help of Cobb-Douglas
Production Function, which is the basics of any production estimation using role of
capital and laobor productivity.
The time frame for this study was just confined to 16 years because of limitation
of time and resources, the same may be increased for having a holistic understanding
of the issue.
This study was conducted with the help of secondary data, which has its own
biases associated with it, the similar study can be carried with the help of primary data
by selecting a case study of any textile hub, as it will give a first insight of the issue. Last
but not the least, the institutional arrangement of textile market may also be explored.