The readymade garments (RMG) industry in Bangladesh received the maximum allocation in budget in the past 10 years, but that is still not enough to do away with the hindrances in this sector, Bangladesh Garments Manufacturers and Exporters’ Association (BGMEA) President Rubana Huq said recently after the National Budget for 2019-20 was presented.
Finance Minister AHM Mustafa Kamal proposed an increased allocation of Tk 2,825 cr for the garments sector in this year’s Budget, with a 4 per cent rise in export incentives and a 1 per cent increase in incentives to other sectors of the industry. The allocations are minimal for the kind of challenges the sector is facing, and a 3 per cent increase in incentives would have sufficed, Huq said.
As production cost has increased by 29.4 per cent and lead time has increased as well, lack of innovation and deficit in technological upgradation are challenges that cannot be tackled by only an increase of 1 per cent in incentives, she said. Thirty factories shut down operations last year, she said.
BGMEA’s suggestion of reducing the corporate tax rate to 10 per cent from 12 per cent and demand for funds for research and development and product innovation were not seen in the proposed budget, she added.
