Govt owes Tk 5.55 billion as cash incentives to jute exporters

---

Yasir Wardad The government's debt to jute exporters as cash incentives rose to more than Tk 5.55 billion taking into account the amounts of four fiscal years - FY '10 to FY '13 - which is creating a liquidity crisis in the sector. Sources said the exporters have sought Tk 10.55 billion budgetary allocation from the ministry of finance (MoF) for their incentives. The total debt of the government to jute exporters as cash incentives will come to Tk 5.55 billion in the outgoing fiscal, Bangladesh Jute Spinners Association (BJSA) official data revealed. The entrepreneurs including spinners, raw jute exporters, and jute goods exporters are yet to get the cash incentives of the four fiscal years. According to the BJSA, in FY '10, the government allocated Tk 3.0 billion for cash subsidy whereas they were supposed get Tk 3.93 billion. In FY '11, Bangladesh exported goods worth nearly Tk 53 billion and considering the 10 per cent incentive, the sector was to get Tk 5.3 billion against the government allocation of Tk 3.0 billion. The trend continued in the following fiscal years and the exporters were to get above Tk 0.81 billion and Tk 1.5 billion in FY '12 and FY '13 respectively. BJSA, which contributes nearly 63 per cent to the jute sector's export, sent a letter to the finance minister in this connection on April 3 last seeking allocation of Tk 10.55 billion as cash incentive for the sector. "In the letter, BJSA said that in the upcoming fiscal year the jute sector would need a minimum of Tk 5.0 billion as export subsidy. To meet both current and past debts the sector would need Tk 10.55 billion," BJSA secretary Shahidul Karim told the FE. An official at the ministry of textiles and jute (MoTJ) told the FE that the ministry has also sent a letter on April 24 last to the secretary of the finance division under the MoF. The MoTJ recommended for Tk 10.55 billion allocation in the supplementary budget for FY '13 or in the next budget for FY '14 to meet the debts and cash incentive for the next fiscal year. BJSA chairman Muhammad Shams-uz Zoha told the FE that cash incentives had helped the industry in its revival. The sector touched a billion-dollar export landmark in FY '11 and the exporters are trying heart and soul to increase it, he said. Mr Zoha said many of the factories are suffering from a liquidity crisis after failing to get their export subsidy. "The exporters take the cash incentive into consideration while fixing the price of an export item. If they can't get the subsidy timely, it directly affects export of next season," Zoha said in explanation. Mr Zoha also urged the government to withdraw the imposition of 5.0 per cent tax on cash subsidy. Bangladesh Jute Mills Association (BJMA) chairman Najmul Huq told the FE that the government should pay the cash incentives timely to help boost export. Mr Huq proposed to extend the 15 per cent tax rebate facility on the profit from jute goods until 2016 to minimise losses. "The government should withdraw 5.0 per cent tax on export subsidy following the reduction in number of export destinations," he said. The sector fetched US$ 860 million in exports with a growth of 6.7 per cent in the first ten months (July-April) of the outgoing fiscal. Total target of shipment for the current fiscal year is $ 1,086 million.