Apparel exporters need additional support to stay the course
Apparel exporters and textile millers demanded the federal government accommodate more procedures in the proposed funds to recuperate exports and buck up work creation in a way that the sector may weather the looming economical storm unleashed by the pandemic.
Steps had a need to revive exports are absent in the spending plan, and in addition, source tax has got been jacked up to 0.50 % from 0.25 % for the sector that fetches more than 84 % of the full total export earnings, they explained.
Garment makers said they get some good type of incentive from the federal government every year however the support must have been extensive this year given the economical meltdown that's sweeping around the world.
The garment and textile millers want the federal government to double cash incentive on export receipts from all destinations to 2 per cent at least for the moment, which, they said, would help them meet their meet in the global market.
"The budget is as usual unless lots of concrete actions are taken up to revitalise garment exports," said Mahmud Hasan Khan Babu, managing director of Soaring Group, an apparel exporter.
Taking into consideration the time and the entire business condition, the garment sector deserves a decrease in source tax to 0.25 % and a rise in cash incentive to 2 %, he said.
"We see a grim photo in work orders at least for another three months as most Western retailers didn't reopen their outlets fully. So we need support to remain the lessons," said Fazlul Hoque, taking care of director of Plummy Fashions, another leading exporter.
Hoque said many of the garment companies cannot borrow from the government-announced stimulus funds as a result of stringent conditions.
If the conditions are calm at least for the micro, cottage, small and channel enterprises, many factories would survive the pandemic-induced recession, he added.
"The finance minister should have planned something big for the garment sector," said Shahidul Haque Mukul, managing director of Adams Apparels.
For example, he said, the federal government could have announced more money incentive on exports to the EU and the US, the two big markets that take about 80 % of Bangladesh's total garment shipment.
"This was not the proper time to increase source tax," said MA Jabbar, managing director of DBL Group, another best apparel exporter of the united states.
The federal government should provide special healthcare support to garment workers, he said, adding that augmented allocation for healthcare, education and industries could be a game-changer for the economy.
"In this critical time, the federal government should support the backward linkage industries of the garment sector so that they are able to supply quality products in competitive rates," he said.
Had the government had the opportunity to devalue the neighborhood currency against the dollar by simply 10 %, no other procedures were necessary for the sector, said Ahsan H Mansur, executive director of the Policy Research Institute.
Mansur, even so, said the government cannot devalue the local currency arbitrarily due to the united states will then need to foot an enormous import bill.
"However the garment sector demands more incentive to stay competitive in the overseas marketplace and save the jobs of workers."
The apparel industry won't see fresh or foreign investment any time in the future, said AK Azad, managing director of Ha-Meem Group, adding that special measures ought to be adopted for tiny and medium enterprises.
"The repayment conditions for their loans extracted from the stimulus offers could be eased."
Azad sees gloomy times ahead since new work orders found in the sector nosedived by at least 45 %.
Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association, demanded 10 per cent cash incentive, rather than 4 %, at least for another six months.
"If Bangladesh doesn't fare well in the EU and the united states, Indian and Pakistani exporters will get those markets. Isn't it about time garment exporters embarked on all-encompassing benefit addition by improving the principal textile sector," Khokon added.
The government's stimulus package of Tk 5,000 crore for paying garment workers' wages had not been enough as much factories could not avail themselves of the fund, said Arshad Jamal Dipu, vice-president of the Bangladesh Garment Companies and Exporters Association.
The government must have brought down the organization tax for garment factories, he said, adding that the overwhelming target to borrow from the banking sector may possibly shrink the money flow in to the private sector.
