The Bangladesh Garment Manufacturers and Exporters Association on Sunday urged the government to increase the additional cash incentive against garment exports to three per cent from the proposed one per cent for the next fiscal year of 2019-20.
At a post-budget press conference held at the Hotel Amari in Dhaka, BGMEA president Ruban Huq also demanded devaluation of the taka against the dollar.
Finance minister AHM Mustafa Kamal in the proposed budget announced additional 1.0 per cent cash incentive for the RMG sector. The proposal excluded the four areas where the sector is currently getting cash incentive at the rate of 4 per cent.
‘Currencies of our competing countries including Vietnam, Cambodia and Turkey were devalued significantly against the dollar in last couple of years whereas our competitive edge is eroding due to a controlled exchange rate. If the government devalues Bangladesh currency by Tk 1 against the dollar, RMG exporters will get additional Tk 3,400 crore a year,’ she said.
Rubana said that considering the contribution of RMG sector to gross domestic product, the proposed incentive — Tk 2,825 crore — for the sector in the budget was insufficient.
She said if the government increased cash incentive to three per cent from one per cent, it would need additional Tk 5,600 crore.
‘We are demanding the support from the government as RMG manufacturers are facing a precarious situation due to high cost of business and low prices of products,’ Rubana said.
The BGMEA president said that it was unfortunate that some economists in the country tried to show that incentive was not required for the RMG sector as the sector was mature.
‘The real scenario is different. Taste of customers is changing and the world is moving towards fast fashion. When we look at the global trend, it seems our industry is still in its childhood,’ Rubana said.
Replying to a question, the BGMEA president said that they needed special support as the sector had been facing challenges of rising cost of production, longer lead-time, absence of research and development, product diversification and value addition and innovation.
Rubana said that they had proposed that the government allow tax-free import of eight fire fighting equipment in the budget but it allowed import of five products with 5 per cent reduced tax.
She demanded inclusion of three more products in the list.
The BGMEA president demanded bringing down the interest rate of bank loans to single digit within the shortage possible time for the readymade garment sector.
She praised the budget for allocating Tk 100 crore as start-up capital for youths.
Rubana once again termed the proposed budget public welfare-oriented and investment-friendly one.
BGMEA senior vice-president Faisal Samad, vice-presidents SM Mannan Kochi, MA Rahim and Md Moshiul Azam Shajal and director Sharif Zahir were present, among others, at the press conference.
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