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17 June, 2019 12:32:58 AM / LAST MODIFIED: 17 June, 2019 12:33:51 AM

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BGMEA wants more allocation to resolve industry problems

POST-BUDGET REACTION
STAFF REPORTER, DHAKA
BGMEA wants more allocation to resolve industry problems
BGMEA president Rubana Huq speaks at a press conference in the capital yesterday. photo: courtesy

Bangladesh Garments Manufacturers and Exporters’ Association (BGMEA) president Dr Rubana Huq has said the ready-made garments industry received the maximum allocation in budget in the past 10 years but it is still not enough to cover up the existing hindrances of this sector.  

“Our production cost has increased by 29.4 per cent.

Lead time has also increased. Besides, lack of innovation and deficit in technological upgradation are challenges which can’t be faced by only an increase of 1 per cent in incentives,” she added.              

Moreover, 30 factories closed their shutters last year, she said.

She was talking at a press briefing yesterday after the national budget for FY2019-20 was declared on Thursday.

In this year’s budget, Finance Minister AHM Mustafa Kamal has proposed an increased budget of Tk. 2,825 crore for the garments sector, with a 4 per cent increase in export incentives and a 1 per cent increase in incentives in other sectors of the industry.

“The allocated budget is minimal for the kind of challenges this industry is facing. A 3 per cent increase in incentives would have done the job,” Huq said.

 “We suggested a budget allocation for garments workers’ social security, but it is not seen in the budget proposal. I would request the finance minister to include this in the budget,” Huq said.

Responding to a query, Huq said: “We export basic polo T-shirts worth USD 6 billion. We are laying emphasis on product diversification, but this is not going to help us compete in the global market in future.”

“We suggested to cut the corporate tax rate to 10 per cent from the existing 12 per cent. We also demanded funds for research and development and new product innovation. But these are not seen in the proposed budget,” she added.

She further said: “The government has allocated another Tk. 100 crore to create new startup companies. We laud this initiative.”           

The BGMEA president also suggested building technology such as enterprise resources planning (ERP) and product customization software.   

The tax rate of the textile sector is 15 per cent, which will expire by 30 June this year, she added.

“Considering the contribution of this sector to our economy, it is unquestionably a people-oriented budget. But we are 70 per cent satisfied from the industry perspective,” said Huq.

The readymade garments industry plays an important role in generating employment and fostering economic growth. "Considering this, the cash incentive is very small and minimal for us," she added.  

According to the US Green Building Council (USGBC), the total number of LEED-certified garments factories in Bangladesh is 90, including 24 platinum-rated buildings.

Some 15 buildings may get the LEED certification from the USGBC soon as they are nearing their completion of processes. More than 250 garments

factories also applied for LEED certification from the USGBC, according to industry insiders.

EA

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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