In the fiscal year 2017, apparel sector received Tk804 crore as cash incentives against exports to non-traditional markets
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has urged the government to reconsider increasing cash incentives from 1% to 3% against exports to traditional market for the next fiscal year.
The apparel sector platform, however, termed the proposed budget as inclusive, business-friendly and pro-people.
BGMEA President Rubana Huq made the call at a post-budget press conference in the capital on Sunday.
BGMEA Senior Vice President Faisal Samad, Vice President MA Rahim Feroz, Md Moshiul Azam Shajal and SM Mannan Kochi were present at the conference.
In the proposed budget for the FY20, the government proposed 1% cash incentive against export of apparel goods to traditional export destinations and allocated Tk2,825 crore for this.
The apparel sector, now a $30 billion industry, had sought 5% cash incentives against exports to all destinations, which would cost Tk14,125 crore.
At present, apparel makers enjoys 4% cash incentives for exports to non-traditional export markets.
“In our budget proposal for fiscal year 2019-20, we had sought an allocation of Tk14,125 crore or 5% cash incentives against exports to all destinations but government has given 1% cash incentives for traditional market,” said Rubana Huq.
"Considering the present status of the sector, we are proposing that the government reconsider its proposal and increase cash incentives to 3% for traditional export destinations," said Huq, also managing director of Muhammadi Group.
“Providing 3% cash incentives on exports of apparel goods to traditional markets will cost additional Tk5,650 crore,” she mentioned.
In the fiscal year 2017, apparel sector received Tk804 crore as cash incentives against exports to non-traditional markets.
Meanwhile, the apparel sector leader urged the government to devalue BDT, which would help increase competitive edge of Bangladeshi exports in the global export market.
Due to controlled exchange rate, she argued, Bangladeshi manufacturers were losing competitive edge in the global market, which economists also admitted.
If the government devalued taka by one against USD, the apparel sector would get Tk3,400 and 1% cash incentives was very small comparing to devaluation gain, Huq stated.
In addition, the BGMEA urged the government to withdraw import duty on security and workplace safety related equipment to make the sector safe and eco-friendly.
"As the government did not allocate Tk500 crore as we had demanded for Textile Upgradation Scheme, we now want a fund from Tk100 crore for start-ups and Tk50 crore for research and innovation," said Huq.
"This we want for technology upgradation, product diversification and value addition, and research," she added.