The export-oriented ready-made garment factory owners urge pre-Eid cash disbursement of Tk 4.5 billion to ensure timely salary payments for workers during Eid-ul-Azha.
In this regard, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President SM Mannan Kochi and BKMEA Executive President Mohammad Hatem have sent a letter to Finance Minister Abul Hassan Mahmood Ali.
The letter, also obtained by The Business Post, states that the garment factory associations are citing a 50 per cent increase in production costs due to recent national and international factors and request the government expedite the disbursement of cash incentives. This financial strain threatens their ability to pay workers' salaries on time for Eid ul-Azha.
BGMEA President SM Mannan Kochi told The Business Post, "The prices of all services, including gas, electricity, and water, have increased. At the same time, workers' wages have also hiked. However, the prices of garment products in the international market have decreased.
"In this situation, businesses are facing financial crises, and we requested the government to disburse the incentive amount so that we can pay the workers' wages before Eid."
According to BGMEA sources, the export-oriented RMG owners seek the full payment of Tk 6,500 crore worth of cash incentives previously declared by the government against the FY24 exports' income. However, the factory owners only received Tk 2,000 crore in May 2024, and the due amount now stands at Tk 4,500 crore.
BGMEA and BKMEA warn of a deep crisis in the garment industry due to a confluence of factors: the post-pandemic (Covid-19) economic slump, rising geopolitical tensions, and high inflation fueled by the Russia-Ukraine and Palestine-Israel wars. These factors are negatively impacting the global apparel market, with ripple effects on Bangladesh's economy.
Mohammad Hatem said, "The government has given us a partial payment of the cash incentive. But it will not fulfil our needs. We want the due amount."
The letter written to the finance minister states that if the salaries and bonuses of the workers and employees are not paid on time before Eid-ul-Azha, a hostile environment may occur in the country. Therefore, it is very important to disburse the cash incentives, as they provide the workers' salaries, bonuses, and operating expenses.
The letter also read that the owners of the ready-made garments industry are under multifaceted financial pressures ahead of Eid-ul-Azha. In addition to the payment of salaries and bonuses, we have to pay utility bills, which require a lot of money in a short period. In this situation, the owners are deeply concerned about the payment of workers' wages.
Both trade bodies, in the letter, have requested the Ministry of Finance that exporters would have gotten some relief if they could get the remaining cash incentives. At present, many factories' applications are in banks. Many files are being processed for audit at the Bangladesh Bank, and other files are waiting for the incentive disbursement.
