Garment factories in SME category to get cash incentive

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The government has extended policy support to garment exporting factories falling beneath the small and medium enterprise (SME) category to improve their competitiveness during this time of the coronavirus pandemic.

The Bangladesh Bank (BB) yesterday issued a notice stating that such garment factories focusing knitwear, woven items, sweaters, terry towels and home textiles would get a cash incentive.

Factories whose exports total up to $5 million are believed as SMEs in the garment sector. So, they will enjoy the benefit.

A 4 % incentive will be provided on 30 % value addition whether or not the garment items were made out of imported fabrics and yarn, the notice said.

The SMEs will manage to avail the power on export receipts of last fiscal year, it added.

The big units have been enjoying a 4 per cent cash incentive on export receipts on make use of local yarn and fabrics in production and manufacturing of garment export.

The federal government has been providing it since 2009 when the neighborhood factories were suffering from the fallout of the global financial recession of 2007 and 2008.

Now the federal government has made a decision to give this benefit to the SMEs to greatly help them grow and create new entrepreneurs in the united states.

"Our small industries will be benefitted out of this move," said Mohammed Abdus Salam, acting president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Currently, the small and medium units cannot contend with the bigger ones.

So, the move will increase the competitiveness of the SMEs and one day they will become big exporters of the country, he said, adding that the brand new move would can also increase employment.

The export volume and value may also increase, he added.

Mohammad Hatem, vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), echoed the same.

More than 50 % or 1,500 of factories are SMEs, he said. "It was our long-time demand from the federal government," he said.

But Arshad Jamal Dipu, vice-president of the BGMEA, said the SMEs might not be greatly benefited from the brand new move by the government.

"We proposed that the federal government expand this is of SMEs this season. We suggested the government consider units as SMEs if their exports were $15 million nonetheless it was finally left at $5 million," he said.

A Matin Chowdhury, former president of the Bangladesh Textile Mills Association, said the neighborhood primary textile sector will be affected just a little by the move but it was also true that the federal government needs to assist the neighborhood SMEs so that they could expand and grow.

"This is a particular kind of support to the SMEs from the federal government," said Matin Chowdhury.

Currently, the neighborhood spinners can supply practically 90 % of recycleables to the knitwear sector and 40 per cent of raw materials to exporters of woven items.

The government has recently disbursed Tk 10,500 crore to the garment sector for paying wages and allowances to personnel since April this year as a result of the coronavirus pandemic.

Moreover, the government has allocated Tk 33,000 crore for large industrial units, Tk 20,000 crore for the cottage, micro and small and medium industries and other policy support to handle the fallouts of the pandemic. 
Source: https://www.thedailystar.net

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