FBCCI redesigns stimulus demand
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) yesterday demanded formation of a "financial crisis mitigation fund" to provide assistance to the sectors affected by fallout from the global recession.
Annisul Huq, president of the apex trade body, also urged the government to arrange funds in a 'block allocation' from its internal resources.
The FBCCI will submit a proposal revised with new demands to Finance Minister AMA Muhith today.
Huq spoke to reporters yesterday to reveal the new proposal after a meeting with businessmen, trade body leaders, chamber leaders, exporters and importers at the Federation Building.
The proposal says Bangladesh Bank will roll out loans from the block allocation to the entrepreneurs of the affected sectors at a 6 percent bank interest rate in line with the central bank's guideline.
The borrowers will repay the loans within five years from 2011, according to the proposal. "Giving stimulus packages to the affected sectors in this system will be more effective," Huq said.
In the proposal, the FBCCI also asked the government to form a fund named "Bangladesh power fund" to address the power crisis immediately.
The FBCCI also suggested the issuance of power fund bonds with a seven-year term and 7 percent interest rate.
Huq also suggested the government purchase power from captive power plants, as many businessmen are ready to sell electricity to the government from their plants.
Huq did not mention the amount of the revised stimulus package and the allocation for "Bangladesh Power Fund".
But he said: "The size of both funds will be as big as possible as all the affected sectors have been included in the proposed package."
Earlier, in a meeting with Prime Minister Sheikh Hasina, the FBCCI president proposed Tk 6,000 crore in a stimulus package for the affected sectors, but it was critised by different quarters.
Huq yesterday called for initiatives to get funds from the International Monetary Fund, the World Bank and Asian Development Bank as those organisations have recently launched a bailout package of $850 billion.
"Bangladesh as an LDC should be able to receive an allocation from this fund," he said.
Huq urged the government to keep the interest rate spread between the cost of fund and the interest on deposits at 2.5 percent.
He also proposed fixing the tax rate at 25 percent for manufacturing companies, whose yearly income is less than Tk 1 crore, 30 percent for the manufacturing companies whose yearly income is more than Tk 1 crore and 35 percent for trading and non-manufacturing companies in the upcoming national budget for fiscal 2009-10.
The FBCCI boss urged the government to keep the revenue collection target at Tk 55,000 crore in the budget for fiscal 2009-10 with an estimated growth rate at 6 percent.
The apex trade body also called upon the government to bring down the import duty to 1-2 percent by 2016 to speed up rapid industrialisation.
Huq also asked the government to cap the duties on import of capital machinery at 1 percent, on intermediate goods at 5 percent, essential intermediate goods at 12 percent and on luxury items at 25 percent in the upcoming budget.