Bangladesh News

The government is likely to announce an additional recession package of Tk 2,000 crore within this month to promote different sectors suffering from the global meltdown.

Finance ministry sources say they are considering allocating the money to the new areas like product diversification, ship building, frozen food and apparel sector.

A committee, recently formed by the government and headed by former finance minister M Syeduzzaman, already submitted its report on the issue to the finance ministry.

The finance ministry is now finalising the stimulus package on the basis of the report.

Subsidy under the new recession package might be given to the readymade garment exporters and their backward integration only for new export destinations as per the recommendation of the committee, finance ministry sources said.

The committee recommended giving five percent cash incentive to the readymade garments including knitwear and woven garments for the next five years.

According to the committee, all the export destinations except EU, the US and Canada will be considered as new markets.

The ministry is also considering forming a fund for product diversification and small and medium apparels sector affected by the global recession.

In the last fiscal year, the government had allocated additional 2.5 percent subsidy to jute, leather and frozen shrimp sectors to tackle the fallout from global recession, but no subsidy had been given to the readymade garment sector.

But, exports in the readymade garment sector have decreased by 20 percent in the first three months of the current fiscal year and that is why the government is considering giving incentive to this sector.

The shipbuilding, evolving as a potential export-earning sector in the country, may get 7.5 to 10 percent export subsidy.

Besides, the government is considering to give banking facilities to help export sector overcome the pinch of global economic downturn.

The finance ministry, however, decided to increase the term of loan rescheduling by three months for the export oriented industries including frozen food, leather and leather goods, jute and jute goods, apparel (spinning) and RMG sectors without any down payment.

The term for loan rescheduling without any down payment fixed till September earlier may now be extended to December, sources said.

Finance ministry sources said a total of Tk 5,046 crore was allocated for giving subsidy and incentives in this year’s budget and Tk 3,046 crore was fixed for those sectors, which are already getting the export subsidy.

The ministry has already released Tk 1,311 crore out of Tk 3,046 crore for the sectors, sources added