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22 July 2024

Business Insider Bangladesh

BTMA urges govt to withdraw decision on reducing cash incentives

BI Report || BusinessInsider

Published: 00:55, 7 July 2024  
BTMA urges govt to withdraw decision on reducing cash incentives

Photo: Collected

Bangladesh Textile Mills Association (BTMA) president Mohammad Ali Khokon on Saturday urged the government to withdraw the decision to lower cash incentives for them and thus continue the facilities like in the past to protect the industry.

"Our neighboring country India graduated from the Least Developed Countries (LDC) in 2004. The country is providing a lot of facilities to their textile entrepreneurs right now. We urge our government to ensure alternative cash incentives even up to 2029," he said.

Khokon said this while addressing a press conference at the BTMA auditorium in the capital Dhaka, reports BSS.

This incentive was reduced on the ground of LDC graduation. In this, cash assistance will be reduced to exporters in 43 sectors including ready-made garments, leather, jute, agriculture.

Khokon claimed that they were not able to manufacture their products due to lack of gas. In the last few months, he alleged that the problem of gas supply has been severe while the textile mills are being able to utilize maximum 40 percent -50 percent of their production capacity.

"The gas tariff has increased 250 percent amid severe gas crisis. Many of the BTMA members can't operate their mills due to gas crisis in different areas including Narayanganj and Gazipur today too," he claimed.

The central bank has issued a notification on June 30, 2024 reducing the cash assistance for all types of exports.

The BTMA president alleged that reducing the EDF fund to $20 billion from $30 billion, increasing the interest rate at 14.5% and the problem related to opening up of LCs put the industry into tough position.

"The textile industry directly employed 15 lakh people by 519 spinning mills, 930 weaving mills, and 322 dyeing-printing-finishing mills. The textile and apparel sectors contribute to around 13% of the country's economy. The industry can grow further and contribute to the country's economy if we get proper policy support and technology support," he added.

The BTMA president also mentioned that showing of exaggerated export figures by the Export Promotion Bureau (EPB) is hampering the country's vital business sector.

"Amid multiple challenges including gas, electricity, and dollar crisis, reducing cash incentives would jeopardize vastly the industry and slow down its growth. Even it may lead to its demise like the jute industry of Bangladesh in the future. There might have been any conspiracy," Khokon said.

According to the EPB data, exports were $47.47 billion in the July-April period of fiscal 2023-24. However, the amount stood at $33.67 billion after the correction, according to data released by the central bank on Wednesday.