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Subsidies help only fill buyers pockets – Advisor to PM
05 Nov '09
1 min read
Providing continuous subsidies to the export oriented clothing manufacturing sector would not prove to be fruitful in the country's interests, as these benefits are passed on to the overseas buyers who demand competitive prices for their purchases.
This was mentioned by the economic advisor to the Prime Minister, Mr Mashiur Rahman at a seminar organised by the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), on the sidelines of the fifth knitwear exposition.
He said that as and when the government has increased incentives and subsidies, the overseas buyers have demanded lower prices in the same proportion, which nullifies the effect of the subsidy and in no way serves the local exporter.
He also admitted that, the existing high bank interest rate is really a problem for industrial sector, but if the interest rate on loans is reduced, it will also lead to a cut in deposit rates which in turn leads to massive withdrawals, leading to less debt financing in the industrial sector.
Instead, he stressed on readjusting energy tariffs somewhere at an upward level, improving transport infrastructure and developing more ports for the growth of business.
This was mentioned by the economic advisor to the Prime Minister, Mr Mashiur Rahman at a seminar organised by the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), on the sidelines of the fifth knitwear exposition.
He said that as and when the government has increased incentives and subsidies, the overseas buyers have demanded lower prices in the same proportion, which nullifies the effect of the subsidy and in no way serves the local exporter.
He also admitted that, the existing high bank interest rate is really a problem for industrial sector, but if the interest rate on loans is reduced, it will also lead to a cut in deposit rates which in turn leads to massive withdrawals, leading to less debt financing in the industrial sector.
Instead, he stressed on readjusting energy tariffs somewhere at an upward level, improving transport infrastructure and developing more ports for the growth of business.
Fibre2fashion News Desk - India
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