Govt delay in paying arrear cash incentives
Leading export sectors facing fund crisis
Doulot Akter Mala
Country's leading export sectors are facing acute fund crisis due to unusual delay of the finance ministry in clearing arrear cash incentives worth Tk 5.5 billion (Tk 550 crore) until February, which was allocated in the budget of the current fiscal (2005-06).
Exporters alleged that the export of the country would be affected badly in the current fiscal, as the government was reluctant to release the allocated cash incentives for more than 10 export sub-sectors.
The government had declared cash incentives to encourage the leading exporters of the country.
The frozen foods sector is allowed to receive 10 per cent while leather footwear 5.0 per cent and readymade garments (RMG) 5.0 per cent cash incentives.
The government owes to RMG sector Tk 3.5 billion (Tk 350 crore), frozen foods sector Tk 1.5 billion (Tk150 crore), leather sector Tk 150 million (Tk 15 crore) and jute sector Tk 200 million (Tk 20 crore).
Meanwhile, Bangladesh Frozen Foods Exporters Association (BFFEA), Bangladesh Jute Mills Association (BJMA) and Bangladesh Vegetables and Allied Foods Exporters Association leaders urged the government to clear their outstanding amounts.
Exporters feared that the overall export earning would slow down due to such arrears.
Exporters said through a revised budget, the government usually allocates minimum Tk 1.5 billion (Tk 150 crore) every year in February-March as cash incentives for the country's export sectors.
But the government has yet to do the same this year, they lamented.
They said the finance ministry had disbursed Tk 700 million (Tk 70 crore) as cash benefits in December last.
Finance ministry has so far only Tk 600 million (Tk 60 crore) as cash incentives in the budget of the government against Tk 5.5 billion arrear, sources said.
Talking to the FE, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) president Fazlul Haque expressed concern over the non-disbursement of the allocated amount to the exporters.
He said the government should clear the arrears before the next budget.
"Recently, the government of India allocated 23 to 25 per cent cash incentives for the RMG sector. Following this, the government of Bangladesh should consider the exporters' interest to compete with the neighbouring country", he added.
BFFEA Secretary General Towhidur Rahman said the frozen foods sector as an agro-based industry has to disburse interest-free loans to the poorest shrimp farmers in Bagerhat, Satkhira, Khulna and Cox's Bazar.
"Fund crisis will create a negative impact on the next year's export if we cannot provide cash assistance to these farmers for further production in the peak season", he feared.
The frozen foods exporters usually prepare their production plan depending on the government's allocated 10 per cent cash incentives, he further said.
The government diverted the cash incentives of this sector to meeting the current fertiliser crisis, depriving the large foreign currency-earning sectors of the country, he added.
BFFEA Chairman Maksudur Rahman, in a recent letter, urged the Finance ministry to release at least Tk 1.5 billion arrear payments immediately against the export of frozen shrimps.