Export-oriented industries to get Tk 2,500-3,000cr in cash subsidy, says minister

The government may allocate Tk 2,500-3,000 crore cash subsidy to affected export-oriented industries in the recession package it is going to announce next week to tackle the fallout of global meltdown.

"Only the affected exporters will be given bailout assistance from the package, and it may be Tk 2,500 crore to Tk 3,000 crore'" Commerce Minister Faruk Khan told reporters at his office yesterday.

And Finance Minister AMA Muhith said on the day the recession package would be announced before Prime Minister Sheikh Hasina goes abroad.

Hasina is scheduled to leave for Saudi Arabia on April 22 on an official visit.

Components of the package were already made public earlier, Muhith said while talking to journalists at his office after a meeting with representatives of the Association of Development Agencies Bangladesh.

Finance ministry sources said the sectors to get cash subsidy include jute and jute goods, leather, frozen foods, garments, textile etc. There would be a committee to recommend cash subsidy.

Additional cash subsidy would be given in the next fiscal year, the sources added.

Meanwhile, many export-oriented sectors now get cash incentive, and Tk 1,050 crore has been allocated for this in the present budget. Of the amount, Tk 243 crore was released early this month.

The recession package would consist of bank facilities as well as tax and other facilities apart from cash subsidy.

Bangladesh Bank (BB) had earlier issued directives to the commercial banks in this regard at a meeting of their chief executives.

The bank facilities consist mainly of loan rescheduling without down payment and lower interest rate. Six sectors will get this rescheduling for six months.

The central bank recently told the commercial banks that they would not be allowed to charge interest higher than 13 per cent.

In a related development, the World Bank (WB) last week cautioned the government about the demands for bailout. This might not benefit the poor, the WB said.

And the government does not have adequate fiscal space to finance large bailout packages, it noted.

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