The New Nation - Internet Edition

BUSINESS REPORT

The government on Monday released Tk 304.75 crore to be paid as cash subsidy to 11 major export sectors to which the government already owes Tk 296 crore subsidies in arrears.

The Ministry of Finance through a circular informed the Bangladesh Bank and other parties concerned about the disbursement of the Tk 304.75 crore cash incentive fund for exporters in the current fiscal year, an official of the ministry said.

As pledged, the government owes the exporters of those 11 selected sectors around Tk 300 crore in cash subsidies at various rates to be disbursed on submission of export receipts.

The fund released from the 'export subsidies' head of the current budget also includes the Tk 3.67 crore subsidy for tobacco export that has remained unpaid since FY2006-07, the official added.

But, as of July 7, the government owed the exporters Tk 296 crore as cash subsidies, up from Tk 233 crore at the end of FY08. The arrears were only Tk 62 crore in FY '07.

The government owes exporters of RMG Tk 121 crore, frozen foods Tk 62 crore, leather and leather goods Tk 32 crore, jute and jute goods Tk 60 crore, vegetables and fruits Tk 11 crore, and potato Tk 7 lakh.

Of the newly-disbursed Tk 304.75 crore, the ministry released Tk 163.77 crore against exporters of readymade garments, Tk 79.28 crore against frozen food, Tk 34.38 crore against leather and leather goods, Tk 11.32 crore against raw and Tk 10.30 crore against processed agricultural products, Tk 0.96 crore against handicrafts, 0.43 crore against crushed bones, Tk 0.30 crore against potato, Tk 0.29 crore against Halal meat, and Tk 0.01 crore against poultry products.

The apparel exporters get cash subsidy at the rate of 5.0 per cent of their exports, frozen foods 10 per cent, leather 15 per cent, agriculture 20 per cent, meat 20 per cent, and poultry 15 per cent.

Meanwhile, the government has decided to phase out the cash subsidy for exports amid allegations that some exporters had been misusing the incentive.

Earlier, the government took an initiative to clear the cash subsidy arrears of the country's export sectors within 30 days of application.