Dhaka, Bangladesh (BBN)- The government has cut cash subsidy for four export items including frozen foods in the current fiscal year, officials said in Dhaka on Tuesday.
The exporters will receive cash subsidy on the products against net repatriation of the FOB (free on board) prices from July 1, 2010 to June 30, 2011, a central bank circular said.
Frozen foods exporters expressed concern over reduction of the cash subsidy for the exportable items, saying that they would lose their competitiveness in the global market.
“Exporters will face difficulties because of declining cash subsidy for frozen foods,” Vice President of the Bangladesh Frozen Foods Exporters Association Maqsudur Rahman said, adding that the exporters would lose their competitiveness in the international markets as the cost of production of frozen foods would rise.
“We’ve issued a circular in line with the finance ministry's decision on cash subsidy for the fiscal 2010-11,” a senior official of the Bangladesh Bank (BB) said, adding that a total of 17 export products would receive cash subsidy this fiscal.
The cash subsidy for frozen foods came down to 10 percent in FY11 from 12.50 percent of the previous fiscal year while leather goods, finished leather and crust leather have been re-fixed at 15 percent, 4.0 percent and 3.0 percent respectively against 17.50 percent, 7.50 percent and 5.0 percent previously, the BB officials added.
The government will provide 20 percent cash incentive to export of agro-products, including vegetables and fruits, while it is 10 percent for potato, the BB said.
The agriculture sector has already been identified as a priority sector to alleviate poverty through creation of employment opportunities in the rural areas. The government has taken a series of steps to facilitate optimum growth of the sector.
Cash subsidy on home-made textile, bone dust, jute goods, bicycle, light-engineering products, day-old chicks, shipbuilding and ‘halal’ meat will be given at 5.0 percent, 15 percent, 10 percent, 15 percent, 10 percent, 15 percent, 5.0 percent and 20 percent respectively.
The products, which are made of 'hogla', 'khor' and 'akher chobra', will be offered cash incentive at the rates between 15 percent and 20 percent, while it will be 20 percent for liquid glucose.
BBN/SI/AD-21Sept10-11:25 pm (BST)