The government has dropped commerce ministry's recommendation on cash incentive to garment accessories and packaging industry with intent to spur the current export trend of the ready-made garment (RMG) sector.
Sources said finance division has recently given its dissent to the suggestion.
The ministry suggested providing cash incentive to the sectors following a recent meeting with stakeholders after reviewing requests of the Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA).
The representative of the division, who attended the meeting, assured them of considering the facility from the next fiscal year.
The local garment accessories and packaging makers demanded cash incentive last year also.
However, industry insiders are absolutely unhappy after hearing the rejection by finance division.
They said, "We (entrepreneurs concerned) are passing through hard times due to different local and global issues."
They also fear that they will fail to achieve expected earnings from the sectors.
Many entrepreneurs will be discouraged to continue business for lack of necessary incentive as the prices of raw materials and production costs of the sectors have been increased significantly.
For this, according to the insiders, the government should be given cash incentive on a priority basis.
Fabrics and accessories are two major raw materials of the RMG industry.
Some 1,900 accessories and packaging makers under the BGAPMEA Act as the backward linkage industry of the RMG sector and meet almost its total demand, insiders said.
An official said finance division did not consider most of the recommendations.
Finance division has not sit in any review meeting on the issue in the past two years, he added.
Some 43 sectors are enjoying the government's cash incentive/subsidy, ranging from 1.0 per cent to 20 per cent, against their export earnings this FY, 2022-23.
The RMG sector enjoys bonded warehouse and cash incentive facilities.
But the accessories and packaging industry does not get any cash benefit despite their hefty export earnings.
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