The Finance Ministry has released Tk1,000 crore as cash incentives for the exporters as the second installment (October-December) of the current financial year (2023-24) on Monday.
According to a notification from the Finance Ministry, the second installment has disbursed cash incentives against the export of export-oriented domestic textiles, frozen shrimp and other fish, leather products and other approved sectors and special cash incentives at the rate of 1% against the export of ready-made garments products.
Earlier on Monday, the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) urged the finance ministry to disburse the due Tk4,0000 crore export subsidy or cash incentives for the exporters by December on an urgent basis.
Mohammad Hatem, executive president of the BKMEA, sent the letter to the senior secretary of the Finance Division.
Regarding the immediate release of the cash incentives, Mohammad Hatem said that the amount is very little compared to the need.
In the letter, he wrote that the export sectors have been struggling to survive in the current global economic downturn.
“Due to the global recession, most of the factories do not have enough work orders, production is running at 50-60% capacity and the sector is also facing gas shortage,” the letter read.
Moreover, the wage structure of the garment sector has been increased which most garment manufacturers cannot afford in the context of the current situation.
“In such a difficult situation, if the wages and allowances of the new structure are not paid on time, the fear of further labour unrest cannot be ruled out,” he added.
Under these circumstances, it will be very difficult to handle this pressure without the special cooperation of the government and the Finance Ministry.
He said that cash incentives worth Tk1700 crore have not yet been released till June of the last financial year (2022-23).
However, in the first installment of the current financial year, Tk1,400 crore was disbursed on August 22, but currently, there are still due claims of Tk4,000 crore to Bangladesh Bank.
According to the official data, the government allocated cash incentives of Tk7,825 crore for the local exporters, except for those in the jute sector, in the national budget for FY23.
In April, apparel exporters urged the government to provide at least Tk1,500 crore in advance cash incentives from the export subsidy fund, saying that factory owners need special support to pay workers' wages and bonuses ahead of the Eid-ul-Fitr.
