Apparel, textile manufacturers slam budget

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FE Report
Apparel and textile manufacturers Thursday slammed the budget as "imbalanced" and "unfriendly", saying it has failed to address the challenges faced by the country's largest export earners amid the global downturn.
Leaders of the Bangladesh Garments Manufacturers and Exporters Association
(BGMEA) have hastily held a press briefing, stating that the proposed budget has fallen "far short" of their expectation.
"Ready-made garment manufacturers were expecting a direct cash support from the government in the budget," first vice-president of BGMEA Nasir Uddin Chowdhury said, claiming they were worst affected by global slump.
"We were hoping for subsidies on bank interest and diesel purchase among other things to cushion us from the impact of falling global demand for our products. Unfortunately, the budget simply ignored our calls," Nasir said.
Bangladesh Textile Mills Association (BTMA) chief Abdul Hai Sarker echoed Nasir, as he found the budget "unfriendly" to the largest backward linkage industry in the country.
"It's not friendly towards textile sectors. We haven't seen reflection of the pledges the government made to the textile manufacturers earlier," Sarker told reporters.
Finance minister AMA Muhith said most of the export sectors excepting apparel and textile have been hard hit by the global meltdown. He also unveiled a new Tk 50 billion stimulous package for the affected sectors.
Nasir sharply reacted to the finance minister's comments, saying "statistics suggest that the growth in the garment sector is at its lowest in decades due to the economic downturn in our major markets."
The BGMEA leaders said growth of apparel exports stood at 71 per cent in the first month of the outgoing fiscal year, but it declined to a meagre 2.51 per cent in April this year.
He said profit margins for the country's 4500 plus garment exporters have evaporated after order prices declined drastically due to the impact of fallen demands in Europe and North America.
He blasted the proposed duties on textile and apparel equipment, saying it would peg back new investment in the US$11 billion sector.
"The budget has proposed the import tax of capital machinery for readymade garments to be increased to three percent from one per cent," he pointed out.
"The move is appalling. We have earlier suggested the government waive this tax since import of essential capital machinery has already become a luxury amid global downturn," he added.
The apparel leaders, however, have hailed the budgetary move to withdraw the licensing fees amounting to Tk. 500,000.00 on new captive power plant.
They noted that a slew of such moves are needed to help safeguard the country's highest export earning sector in this bleak economic scenario.
The RMG leaders said while the proposed budget has ploughed in more spending on agriculture and strived to boost domestic demand, the apparel was 'neglected' despite it accounts for 14 per cent of the economy.
"We were looking for a more balancing act in this budget to address the needs of both the agricultural sector and the industrial sector as well as a balance between attempts for increasing export and increasing domestic demand" Nasir said.
The BGMEA leaders demanded 'direct and visible' support from the government as well as improvement in the law and order situation to attract more investment in the RMG sector.