Following a request of readymade garment (RMG) exporters for disbursement of cash subsidy by July 10 to enable them to pay the workers’ salary ahead of Eid-ul-Fitr, the Government of Bangladesh has released an amount of Tk8.75 billion, most of which is for the garment and jute sectors, reports Dhaka Tribune.
The amount disbursed by the Ministry of Finance against exports made during the fourth quarter of 2014 includes Tk7.34 billion for RMG and Tk1.37 billion for jute and jute goods.
The disbursement of the five percent cash subsidy was made in accordance with the requisition made by Bangladesh Bank based on reports submitted by various commercial banks.
For fiscal year 2013-14, the Government has allocated Tk22.14 billion for cash subsidy against exports by garment companies, which has been increased to Tk29.5 billion for fiscal year 2014-15 that began on July 1.
Garment exports from Bangladesh increased by 14.83 percent year-on-year to US$ 22.178 billion during the first eleven months of fiscal year 2013-14, as per the data from the Export Promotion Bureau (EPB).
To help continuation of the development of the garment industry, the Bangladesh Government has reduced the duty on flex fibre, a raw material used to make the fabrics bright, from 10 percent to 5 percent for fiscal year 2014-15. Likewise, the duty on artificial staple fibre has also been reduced to 3 percent from the earlier 5 percent.
For fiscal year 2014-15, the supplementary duty on almost all woven fabrics has been reduced from the earlier 30 percent to 20 percent, on most knitted or crocheted fabrics from 45 percent to 30 percent, on track suits and other garments from 45 percent to 30 percent, and on various clothing accessories form 60 percent to 45 percent.
With the presence of more than 5,000 garment factories that together employ nearly 4.2 million workers, Bangladesh is currently the second-largest garment exporter in the world, next only to China.