Tk 1,800cr stimulus to prop up exports

The export sector will be awarded Tk 1,800 crore from the government's Tk 5,000 crore stimulus package this year to weather out global recession.

The sector got Tk 1500 crore last fiscal. At first, the allocation was Tk 1,050 crore.

The finance ministry has already instructed different banks to settle the subsidies the government is providing for the sector as per its incentive policy adopted in the last financial year.

Earlier, 13 sectors were subsidised. Recession-hit three sectors received an additional 2.5 percent subsidy last year. More or less the same policy will be continued this time.

Some more sectors are being subsidised where plastic PET bottle flex and finished leather are the latest two entrants. Those sectors will get 10 percent and 7.5 percent subsidy respectively.

The 13 sectors that were brought under the package include textile sector, frozen fish, leather goods, agricultural products, bicycles, jute goods, 100 percent Halal meat, bone dust and light engineering items.

The stimulus package, in line with the financial crisis worldwide and Bangladesh's export volume, will come under review in the next meeting of the taskforce headed by the finance minister.

The Tk 5000 crore package, as announced in the 2009-10 budget, did not show any break-up of the amounts to be awarded to recession-hit sectors.

When Tk 1800crore has been earmarked for the export sector, the remaining amount will go to the fertiliser sector.

A source in the ministry concerned hinted at raising the stimulus for exporters to Tk2,000 crore by the end of the fiscal year.

However, economists say, instead of wholesale subsidies y it can be provided on case-to-case basis for the non-garments sector.

Akbar Ali Khan, former finance adviser to the caretaker government, said in the post-recession time, a competitiveness will be created in the world economy, so subsidising some sectors is necessary.

Bangladesh Institute of Development Studies (BIDS) Research Director Dr Zaid Bakht is also opposed to any wholesale subsidy.

He feared a difficult situation for the non-garments sector and pleaded that this sector should be subsidised to weather out recession.