Bangladesh Bank on Thursday demanded Tk 2,250 crore from the government as cash subsidy payable to merchandise exporters in the current fiscal year, after the government yesterday raised the subsidy for the two struggling sectors. The central bank in a letter to ministry of finance said the amount sought against 14 products – subsidised to stimulate export earnings in the country – needed to be released soon as demands from the targeted exporters had piled up. Of the total amount, Tk 1389.30 crore will be disbursed against demands made between January to March, while the rest for the final quarter of the current 2015-16 fiscal year, the letter elaborated. BB officials concerned said they, at the insistence of the finance ministry, on Wednesday raised the rates of export subsidy against three items, including for apparel products. ‘With the enhancement of subsidy as asked by the government, the amount of cash subsidy will increase by nearly Tk 260 crore for the current fiscal year,’ a senior BB official told New Age. ‘We could not release subsidy demand of Tk 1389.30 crore made by nearly 30 banks in favour of their exporter clients, due to unavailability of funds.’ The government on Wednesday increased cash subsidies for exporters of garments, leather products and frozen fish. The enhancement will be effective only for the whole of the current fiscal year, a circular of BB said. The cash subsidy for garment exporters to the EU market has been raised from two per cent to six percent and subsidy for leather goods enhanced to 15 per cent from the existing 12.5 per cent. The central bank also increased cash subsidies for frozen fish exporters from $3.79 to $4.98 for a pound of shrimp and from $1.1 to $1.97 for per pound of other fishes. The BB circular also included potato starch in the list of the agro-processing products entitled to cash subsidies. A senior finance ministry official said the extra Tk 80 crore will be spent against the enhanced incentive for leather goods and another Tk 174 crore for the RMG sector. The government decided to widen and boost stimulus in merchandising export to shore up export-oriented industries reeling from the Euro zone crisis, higher production costs and infrastructure deficiencies, the official added. The Export Promotion Bureau data shows RMG export value in Euro zone declined by 2.70 per cent in the first six months of the current fiscal year. From July 1, 2015, all categories of export-oriented RMG industries have been enjoying four per cent incentive, medium and small RMG units enjoy another four per cent incentive, and three per cent incentive has been applicable for export earnings to be generated from countries other than the US, Canada and EU markets.
