Knitwear sector sees glum prospect

Knitwear manufacturers predict a slump in the growth of ready-made garment (RMG) exports if the proposed budget for fiscal 2010-11 is implemented.
In a post-budget briefing, Fazlul Hoque, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said a hike in the tax rate on exports to 1 percent from 0.25 percent would hamper growth.
Finance Minister AMA Muhith proposed the tax hike in the new budget.
At the briefing at the BKMEA office in Dhaka, Hoque said any kind of tax hike at production level would ultimately affect the prices of export-oriented goods.
"But the buyers are not ready to pay higher prices for garment products at this moment, as many are still struggling to recover from global recession," Hoque said.
He urged the government to allocate at least Tk 500 crore for market promotion, manpower development, and product diversification from the proposed stimulus package of Tk 2,000 crore.
But Hoque greeted the fact that the budget proposed to allocate Tk 6,115 crore to develop the power sector. He also said beefing up the public-private partnership (PPP) fund was also a welcome move by the government.
He asked the government to finalise the coal policy as soon as possible. The coal, not gas, should be the prime source of electricity production, as gas reserves are diminishing fast, he added.