Textile sector may face setback
Tuesday, 24 July 2007
M Azizur Rahman
The country's textile and clothing sector might face a setback due to non-implementation of the recommendations of an inter-ministerial taskforce on facilitating the primary textile industries to enhance their capacity.
Not a single recommendation out of the total 12 made one year ago for boosting the country's textile and clothing sector is yet to be carried out, it was alleged.
Rather the incumbent caretaker government has imposed a five per cent duty on the import of textile machinery afresh in the current fiscal, which will enhance the project cost of such industries.
This will also result in the hike of production cost of textile items.
Sources said the previous four-party alliance government constituted the taskforce in August 2005 to recommend necessary policy measures to ensure competitiveness of the country's textile and clothing sector in the global market.
After scrutinising necessary policy options the taskforce placed its 12-point recommendations to the Prime Ministers' Office (PMO) in June last year.
The PMO endorsed the recommendations and subsequently sent those to the concerned ministries and agencies of the government for necessary action in July, 2006.
The PMO also set deadlines for implementation of these recommendations, but none has been executed.
As per the recommendations the entrepreneurs' equity and bank debt ratio would be 30:70 instead of exiting 50:50 for project investment while for dyeing, finishing and weaving projects it would be more simplified.
The taskforce also suggested reduction of bank interest rate to nine per cent, and duty-free imports of raw materials for yarn sizing and spare parts for textile machinery.
It also suggested that export-oriented mills should get 10 per cent cash incentive on their sale up to next five years and enjoy a three-tier income tax provisions - 5.0 per cent up to five years, 10 per cent up to 10 and 15 per cent up to 15 years.
The taskforce recommended setting up of textile engineering departments in all universities and introduction of facilities for institutions necessary to develop human resources for textile sector.
It also suggested setting up of effluent treatment plant (ETP) and hi-tech park with assistance from banks.
When contacted Chairman of the FBCCI Standing Committee on textile and backward linkage industry MA Awal said the recommendations placed by the taskforce were aimed at ensuring the competitiveness of the country's textile sector in the global market beyond 2008 when the global market would be opened entirely under the provision of the World Trade Organisation (WTO).
Awal, also the director of the Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) and immediate past president of Bangladesh Textile Mills Association (BTMA), hoped that the government would implement these recommendations to boost national economy.
The country's textile and clothing sector might face a setback due to non-implementation of the recommendations of an inter-ministerial taskforce on facilitating the primary textile industries to enhance their capacity.
Not a single recommendation out of the total 12 made one year ago for boosting the country's textile and clothing sector is yet to be carried out, it was alleged.
Rather the incumbent caretaker government has imposed a five per cent duty on the import of textile machinery afresh in the current fiscal, which will enhance the project cost of such industries.
This will also result in the hike of production cost of textile items.
Sources said the previous four-party alliance government constituted the taskforce in August 2005 to recommend necessary policy measures to ensure competitiveness of the country's textile and clothing sector in the global market.
After scrutinising necessary policy options the taskforce placed its 12-point recommendations to the Prime Ministers' Office (PMO) in June last year.
The PMO endorsed the recommendations and subsequently sent those to the concerned ministries and agencies of the government for necessary action in July, 2006.
The PMO also set deadlines for implementation of these recommendations, but none has been executed.
As per the recommendations the entrepreneurs' equity and bank debt ratio would be 30:70 instead of exiting 50:50 for project investment while for dyeing, finishing and weaving projects it would be more simplified.
The taskforce also suggested reduction of bank interest rate to nine per cent, and duty-free imports of raw materials for yarn sizing and spare parts for textile machinery.
It also suggested that export-oriented mills should get 10 per cent cash incentive on their sale up to next five years and enjoy a three-tier income tax provisions - 5.0 per cent up to five years, 10 per cent up to 10 and 15 per cent up to 15 years.
The taskforce recommended setting up of textile engineering departments in all universities and introduction of facilities for institutions necessary to develop human resources for textile sector.
It also suggested setting up of effluent treatment plant (ETP) and hi-tech park with assistance from banks.
When contacted Chairman of the FBCCI Standing Committee on textile and backward linkage industry MA Awal said the recommendations placed by the taskforce were aimed at ensuring the competitiveness of the country's textile sector in the global market beyond 2008 when the global market would be opened entirely under the provision of the World Trade Organisation (WTO).
Awal, also the director of the Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) and immediate past president of Bangladesh Textile Mills Association (BTMA), hoped that the government would implement these recommendations to boost national economy.