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Govt turns Santa Claus. T&C sector collects bounty
27 Nov '09
3 min read
The Bangladesh government for the second time in this year, announced a stimulus package totaling to Tk 10 billion, to help its export oriented industries, which includes textiles and clothing to face the impact of the slowdown.
Finance Minister, AMA Muhith, while announcing the second package said, “Our objective for providing the second incentive support is to ensure that none of the country's exporting sector turns sick because of the global financial recession."
He added by saying that this package has been announced in line with the recommendations of the recently formed high-powered taskforce headed by eminent economist and former finance minister M Syeduzzaman.
Providing details of the package, he said that the clothing sector will receive conditional incentive support, under which a 5 percent cash subsidy will be available in first year against exports to new markets, other than EU, USA and Canada.
Besides which, the rate of the subsidy will decrease to 4 and 3 percent in the second and third year respectively, and textile mills will get additional cash support for direct export of yarn to any overseas market, he explained.
Among other incentives, the government will also pay the license renewal fees on captive generators, which will be payable from November 1, 2009 till June 2010 by the private textile sector.
The rate of interest for textile sector will be slashed to 10 per cent from the existing 13 per cent while the time-frame for rescheduling loans for the sector will also be extended until June 2010 from November 1, 2009.
The home textile units would be given the 'forward exchange' facility against their exports in respect of any currency other than US dollar, Mr. Muhith said, adding the new conditions of the loan rescheduling facilities could be applied for the sub-sector.
The small and medium-sized textile mills with exports of US $3.5 million in fiscal year 2008-09 will get an extra bounty of 5 percent incentive, for the additional value of exports it achieves, over and above the export figures reached in fiscal 2008-09.
Moreover, small and medium textile units, without access to captive or diesel-run electric generators, will receive 10 percent subsidy on their electricity bills until June 2010, but will applicable to those who have not availed any loan rescheduling facility.
The government has also issued a circular in order to rationalise the banks' existing service charges and fees, following the discussions with the bankers' association, added the finance minister.
Finance Minister, AMA Muhith, while announcing the second package said, “Our objective for providing the second incentive support is to ensure that none of the country's exporting sector turns sick because of the global financial recession."
He added by saying that this package has been announced in line with the recommendations of the recently formed high-powered taskforce headed by eminent economist and former finance minister M Syeduzzaman.
Providing details of the package, he said that the clothing sector will receive conditional incentive support, under which a 5 percent cash subsidy will be available in first year against exports to new markets, other than EU, USA and Canada.
Besides which, the rate of the subsidy will decrease to 4 and 3 percent in the second and third year respectively, and textile mills will get additional cash support for direct export of yarn to any overseas market, he explained.
Among other incentives, the government will also pay the license renewal fees on captive generators, which will be payable from November 1, 2009 till June 2010 by the private textile sector.
The rate of interest for textile sector will be slashed to 10 per cent from the existing 13 per cent while the time-frame for rescheduling loans for the sector will also be extended until June 2010 from November 1, 2009.
The home textile units would be given the 'forward exchange' facility against their exports in respect of any currency other than US dollar, Mr. Muhith said, adding the new conditions of the loan rescheduling facilities could be applied for the sub-sector.
The small and medium-sized textile mills with exports of US $3.5 million in fiscal year 2008-09 will get an extra bounty of 5 percent incentive, for the additional value of exports it achieves, over and above the export figures reached in fiscal 2008-09.
Moreover, small and medium textile units, without access to captive or diesel-run electric generators, will receive 10 percent subsidy on their electricity bills until June 2010, but will applicable to those who have not availed any loan rescheduling facility.
The government has also issued a circular in order to rationalise the banks' existing service charges and fees, following the discussions with the bankers' association, added the finance minister.
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