Hailing the government for presenting a positive and time-befitting national budget for the fiscal year 2019-2020, the apparel manufacturers have reiterated their demand to raise cash incentives for the ready-made garments (RMG) industry. Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) - the apex trade body of RMG manufacturers at a post-budget press briefing urged the government to allow at least three percent cash incentive for the growth of the industry.
She said, ‘We demanded a five percent cash incentive for exports of apparel products, but in the new budget, only one percent incentive was proposed. Now we are again requesting the government to give at least three percent cash incentive for the growth of the industry’. BGMEA arranged at the press briefing at Amari Hotel in the capital on Sunday.
Rubana said, ‘As the industry is contributing a lot to the country’s economy and creates a huge number of employment, this sector needs continued support to survive in the competitive world.’ Rubana Huq also urged the government to continue support as the sector is going through a critical time and losing a competitive edge in the global export destination.
Total Tk 14,000 crore was required for five percent incentive but the government proposed an allocation of Tk 2,825 crore,” she continued.
Thanking the government for its guidance for bringing down interest rates for loans from banks to single digit, she urged the government to implement the proposal at the earliest possible time.
Citing previous 10 years’ subsidies and export growth she outlined that with four percent subsidy for RMG industry, its export growth increased by 450 percent whereas other sectors, despite getting highest subsidies were unable to reach to its level, she compared.
She quoted that during 2016-17 the industry could avail of Tk 660.88 crore of the fund, while Tk 641.88 crore in 2017-18 and Tk 804.4 crore in 2018-19 from the government as cash incentive.
Identifying devaluation against dollar as a major concern for the industry, she informed, even at least Tk 1 devaluation against US dollar can give the industry additional Tk 3400 crore where the government is giving only Tk 2,825 crore. This needs to be reconsidered. Finance Minister AHM Mustafa Kamal on Thursday proposed an allocation of additional Tk 2,825 crore as cash incentive for the sector for the next fiscal year 2019-20. Currently, apparel exporters enjoy a four percent cash incentives against exports to non-traditional export destinations.
'Even some of us are expanding, but we are having product diversification, we are facing a number of challenges like innovation, challenges, research and development. We are therefore proposing to include the RMG in the government’s ‘Research and Development’ plan through venture incubator for the sectors product diversifications, value addition, fabrics designing and double transformation and others,” said the country’s first female president of the prime export earner.