An extra allocation of around Tk 15 billion is likely to be kept in the upcoming new budget to meet the demand of the apparel exporters lobbying for an increase in cash incentive.
Officials preparing the budget to be announced on June 13 in parliament said there was a huge ‘political pressure’ for increasing allocation against the demand for higher cash incentive by the associations of the export-oriented apparel sector.
The proposed allocation can meet 1 per cent against additional 5 per cent cash incentive demanded by the country’s apparel and textile sector associations at a briefing on May 27 in the capital city, they said.
The associations include Bangladesh Garment Manufacturers and Exporters Association, Bangladesh Knitwear Manufacturers and Exporters Association, and Bangladesh Textile Mills Association.
Mansoor Ahmed, first vice-president of BKMEA, said the proposed amount was much lower than the demand.
The sector needed more support from the government for leading the export earning over US$70 billion by 2024 in line with the sustainable development goals, he noted while talking to New Age on Saturday.
The finance ministry officials noted that the lion’s share of the cash incentive for the export-oriented sector was taken by the readymade garment sector which has already helped to earn $31 billion in the first nine months of the outgoing fiscal.
The amount is over 80 per cent of around Tk 45 billion in the last fiscal year.
At present, apparel exporters get 4 per cent cash incentive as an alternative to duty bonds and duty drawbacks, 4 per cent for apparel products export for the small and medium industries, 4 per cent for export of new textile and garment products and expanding export of textile items to new markets, markets other than the United States, Canada and the European Union, and 2 per cent cash incentive for exports of apparel products to EU market in addition to 4 per cent cash incentive.
The country’s apparel and textile sector leaders have demanded additional Tk 117.24 billion cash incentives annually against readymade garment exports for the next five years to remain competitive in the global market.
BGMEA president Rubana Huq said that the RMG manufacturers were facing a precarious situation due to low prices of products and transition.
She said that manufacturers have been facing continued pressure due to low prices from the buyers and survival of many small factories was at stake.
BTMA president Mohammad Ali Khokon demanded 15 per cent cash incentive, a considerable increase from existing 4 per cent for the textile sector.
He also demanded 16 per cent cash incentive for the US market, saying that Bangladeshi exporters were losing their competitiveness in the market due to high tariff. Shakhawat Hossain/New Age