Business leaders yesterday expressed dissatisfaction over what they said was the neglect of the readymade garment sector in a stimulus package, but lauded the government's "timely" steps for other areas to tackle fallout from global recession.

The mixed reactions came hours after Finance Minister AMA Muhith rolled out a Tk 3,424 crore stimulus package that consists of cash subsidies, loan facilities and social security.

Under the package, the government has marked Tk 1,500 crore for the agriculture sector, Tk 500 crore for farm loan re-capitalisation, Tk 600 crore for the power sector, Tk 374 crore for social security (food) and Tk 450 crore for the exports sector.

Jute and jute goods, leather and leather goods and frozen foods will be beneficiaries of the stimulus to the exports sector.

Asked to comment on other export-oriented sectors, including garments and textiles, Muhith said different steps such as policy support and bank-loan rescheduling have been declared for those areas.

"I welcome the overall initiative taken by the government in response to the demands of the business community. However, it is not a full-fledged stimulus package," said Annisul Huq, president of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the apex trade body.

Huq said the highest export-earning sector should have been given more importance in the stimulus package, as garments exports growth is declining.

"Similarly, the spinning sub-sector has also been hit by the recession. The spinners should also benefit from the announced stimulus package," Huq said.

Talking to The Daily Star, Abdus Salam Murshedy, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said he was not delighted over the terms of the stimulus package, as the government excluded the garments sector.

"Since the government did not grant any cash subsidy for the garments sector, we demand a full-fledged implementation of the policy support, which was earlier demanded from the government. Proper implementation of those demands will help offset losses from the recession," Murshedy said.

Earlier, the BGMEA urged the government to provide bank loans at a single digit interest rate, relaxation of the Credit Information Bureau rules, termination of the 0.25 percent tax at source, extension of loan rescheduling from the three-and five-year terms to seven and 10 years and withdrawal of VAT on utilities.

"I hope the government will consider the garments sector in the second phase of the stimulus package," Murshedy said.

"I am disappointed by the terms of the stimulus package, as the garment and knitwear sectors have not been taken into account," said Fazlul Hoque, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), in an instant reaction to the financial stimulus.

Abdul Hai Sarker, president of the Bangladesh Textile Mills Association (BTMA), said the announced stimulus package is inadequate, as the textiles sector will not benefit from it.

Spinning, under the primary textile sector (PTS), is the most affected by the recession and yet it has been neglected by the stimulus package, Sarker said.

He said the latest move has betrayed the government's "unfeeling attitude" to the spinning sub-sector, which is vital to the readymade garments sector.

Later in the day, leaders of BGMEA and BKMEA from separate press conferences urged the government to review its decision and include woven and knitwear in the stimulus package.

In response to a query, Murshedy said the government should form a sub-committee, if necessary, to review the decision. "We are disappointed with the government's decision as the whole clothing sector has been ignored."

The BKMEA president said if the country's garment sector sinks due to the recession, it would be difficult for the sector to recuperate. "The government has to bear the burden."

Kazi Belayet Hossain, president of Bangladesh Frozen Foods Exporters Association (BFFEA), said increasing the cash incentive from 10 percent to 12.50 percent is too inadequate to offset the losses, as the exports of frozen foods declined by 11 percent in the July to February period due to the recession.

"At present, we are facing a liquidity crisis in the exports of frozen food. We need cash to stay on," Hossain said.

"Cash subsidies would be given against export performances, but the problem is that we are now unable to export the item as demand for the luxury food item has declined significantly in the western countries," he said.

reefat@thedailystar.net