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The government has decided to disburse cash subsidies to the tune of Tk 1.5 billion (150 crore) within the next one week among the entrepreneurs of the export-oriented knitwear sub-sector.
Finance and Planning Minister M Saifur Rahman made the announcement during a meeting Thursday with the leaders of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) at his office.
According to a preliminary estimate of the BKMEA, the ongoing devastating flood caused losses worth Tk 6.0 billion to the knitwear sub-sector, which became the third largest source of foreign exchange earnings.
Referring to the impact of the flood, BKMEA President Fazlul Haq requested the minister to disburse at least Tk 2.0 billion from their due cash incentives worth about Tk 5.0 billion to help them get rid of the present crisis.
In response, the minister agreed to release the amount of Tk 1.5 billion within the next one week.
Saifur also said the government has planned to provide assistance to all affected production and export-oriented sectors, including the poultry and dairy sectors stated to be badly-affected by the flood.
He said loans repayment by those sectors could be suspended and fresh loan will be sanctioned to give them a new lease of life.
"The government will do everything to protect all industrial sectors so that the jobs are protected and export target is achieved," the minister said, adding that no loan-defaulters would remain out of the government assistance.
He also pointed out that they were also contemplating some concessions to affected house-owners, who received loans from the Bangladesh House Building Finance Corporation.
"We are examining the possibilities to give some concessions to house-owners in terms of repayment of loans and its interests. But before it, everything would be reviewed on a case-by-case basis," the minister explained.
The BKMEA president said the knitwear sector may plunge into a deep crisis if the ongoing flood lingers.
"Many exporters could not ship their products in time as the production in most of the factories are remaining suspended due to the flood," he said after the meeting with the finance minister.
The BKMEA leader also warned that there might be a risk of a stock-lot problem as many buyers could revoke their purchase orders if the manufacturers failed to meet the deadline for exports.
Welcoming the decision to release the cash incentives, he said it will be a great help for them at a time when the industry remains in a deep trouble.
Replying to a question, Haq said about 700 entrepreneurs out of 1000 were forced to close their factories due to the flood.
Those, who are still keeping their factories open under special measures, could only produce 20 per cent of their products as their machinery and raw materials have been damaged.
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