Tk 50b second stimulus package soon to keep off recession impact
Tuesday, 21 July 2009
Sheikh Shahariar Zaman
The government is going to finalise the second stimulus package involving Tk 50 billion (5,000 crore) soon to boost domestic demand in a bid to offset the losses incurred due to the global economic recession, said finance ministry sources.
"The main objective of the package is to increase the domestic demand through supporting programmes in the areas of agriculture, power and social security," said a finance ministry official.
The export sector, which is feeling the pinch of the recession, will also get a share of the cash benefit, he added.
Finance Minister AMA Muhith on April 19 last announced the first stimulus package involving Tk 34.24 billion to provide fiscal and policy supports to agiculture, power and export sectors to help ward off any immediate effects of the global recession.
About the fallouts from the global recession another finance ministry official said frozen food, jute, leather, pharmaceutical and some other sectors are facing problems as their exports slumped in the last financial year, but the readymade garment (RMG) sector has so far withstood the impact.
Growth of the RMG sector as a whole was about 12 per cent in the July-May period of last fiscal, which is quite satisfactory as many countries have experienced negative export growth, he explained.
He, however, said last-minute lobbying will decide which sector will get what share of the Tk 50 billion second stimulus pie.
"If the RMG sector can convince the government that it is badly affected by the recession, the government may allocate a fund for them," he said.
In addition to the cash support, policy supports including interest rate cut, taxation facility and more port facilities will also be ensured under the second stimulus package, he added.
The cash incentives announced in the first stimulus package will also continue and the fund will be disbursed twice in July and January, the official said.
"The ministry will release the money of cash incentives to the Bangladesh Bank, which will distribute it to the exporters,' he said.
The power sector is expected to get a substantial share of the stimulus package, he added.
In the first stimulus package, the rate of cash subsidy on jute and jute goods was raised to 10 per cent from 7.5 per cent. For leather and leather goods the rate of cash subsidy was raised to 17.5 per cent and for frozen foods to 12.5 per cent from 15 per cent and 10 per cent respectively.
The government is going to finalise the second stimulus package involving Tk 50 billion (5,000 crore) soon to boost domestic demand in a bid to offset the losses incurred due to the global economic recession, said finance ministry sources.
"The main objective of the package is to increase the domestic demand through supporting programmes in the areas of agriculture, power and social security," said a finance ministry official.
The export sector, which is feeling the pinch of the recession, will also get a share of the cash benefit, he added.
Finance Minister AMA Muhith on April 19 last announced the first stimulus package involving Tk 34.24 billion to provide fiscal and policy supports to agiculture, power and export sectors to help ward off any immediate effects of the global recession.
About the fallouts from the global recession another finance ministry official said frozen food, jute, leather, pharmaceutical and some other sectors are facing problems as their exports slumped in the last financial year, but the readymade garment (RMG) sector has so far withstood the impact.
Growth of the RMG sector as a whole was about 12 per cent in the July-May period of last fiscal, which is quite satisfactory as many countries have experienced negative export growth, he explained.
He, however, said last-minute lobbying will decide which sector will get what share of the Tk 50 billion second stimulus pie.
"If the RMG sector can convince the government that it is badly affected by the recession, the government may allocate a fund for them," he said.
In addition to the cash support, policy supports including interest rate cut, taxation facility and more port facilities will also be ensured under the second stimulus package, he added.
The cash incentives announced in the first stimulus package will also continue and the fund will be disbursed twice in July and January, the official said.
"The ministry will release the money of cash incentives to the Bangladesh Bank, which will distribute it to the exporters,' he said.
The power sector is expected to get a substantial share of the stimulus package, he added.
In the first stimulus package, the rate of cash subsidy on jute and jute goods was raised to 10 per cent from 7.5 per cent. For leather and leather goods the rate of cash subsidy was raised to 17.5 per cent and for frozen foods to 12.5 per cent from 15 per cent and 10 per cent respectively.