Budgetary allocation for cash incentives meagre

The annual budgetary allocation for cash incentives is paltry with a rising number of sectors enjoying the benefit over the years, stakeholders have said.
In the last four fiscal budgets, the government has kept Tk 45 billion every year to promote exports by providing cash stimulus.
Of the total allocation, Tk 40 billion is meant for overall export sector and Tk 5.0 billion is put aside exclusively for jute sector.
Until fiscal year (FY) 2018-19, some 35 export-oriented sectors enjoy this incentive facility.
In the coming fiscal year, according to officials, some more products might be added to the list of eligible sectors for enjoying the stimulus.
Commerce ministry has already finalised a list of new products for providing cash incentives from next year.
Stakeholders said goods exports earned $36.671 billion in FY 2018-19. It was $31.2 billion in FY 2014-15.
But budgetary allocation for cash incentives remained the same-Tk 45 billion up till now.
Since the coverage of such incentives is being increased significantly every year, the allocated funds cannot cover the needs against rising exports.
According to officials, fund shortages against the allocation now reach around Tk 20 billion every year.
In the first three quarters of this fiscal, cash incentive claims worth Tk 50 billion were submitted to the central bank.
However, the government released only Tk 30 billion until third quarter.
Stakeholders claimed an additional Tk 20 billion might be needed to meet the total cash incentives for the current fiscal year.
The Bangladesh Knitwear Manufacturers and Exporters Association recently wrote to finance minister AHM Mustafa Kamal to keep adequate allocation to help make smooth payment of cash incentive claims.
Pharmaceutical, photovoltaic module, motorcycle, chemical, razor and razor blade, ceramic, cap, crab, eel, galvanised sheet/coil, jute goods, jute yearn, hessian, sacking and carpet backing cloths, and apparel products get stimulus.
The list also include intestines, horns and
arteries (without bone), crust and finished leather goods, ship, plastic products, leather goods, light engineering products, furniture and accumulator battery.
Shoes made from synthetic fibres and fabric, frozen fish, charcoal, agricultural products, halal meat, potatoes and seeds, and polyester staple fibre produced from pet bottle-flex also get incentive.
Medical/surgical instruments and appliances, bags made of synthetic and fabrics, disposable plate made of areca leaf sheath, and goods of garment accessories and packaging sectors can lengthen the list.
Cash incentives might be offered to the members of Bangladesh Jute Goods Exporters Association against their exports on a freight-on-board basis.
The ministry has decided to recommend raising the rate of cash incentives for locally produced paper and paper goods to 30 per cent from existing 10 per cent.
It has also sought an increase in incentives to 20 per cent from existing 15 per cent for polyester staple fibre made of pet bottle flex.
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