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Tk4,500cr incentives needed in Q2 of FY24

Only Tk 1,000cr disbursed so far
Hasan Arif
27 Feb 2024 02:14:00 | Update: 27 Feb 2024 02:14:00
Tk4,500cr incentives needed in Q2 of FY24

The Bangladesh Bank may need an estimated of Tk 4,500 crore as incentives against exports in the second quarter (October-December) of the current fiscal year, it says in a letter sent to the Ministry of Finance recently.

The ministry has already disbursed Tk 1,000 crore as incentives during the period, the letter added.

“Such cash incentives are disbursed against exports to export-oriented textiles, frozen shrimp and other fish, leather products, jute and jute products and other approved sectors and 1 per cent of special cash incentives against the ready-made garments sector,” the letter reads.

As of October 26, 2023, the amount of undisbursed incentives for the jute sector was around Tk 202 crore while the figure was Tk 2,862.18 crore for other sectors, excluding jute. The total amount of undisbursed incentives was around Tk 3,064 crore.

Following the applications submitted by the banks, a total of Tk 4,500 crore cash incentives--Tk 300 crore for the jute sector and Tk 4,200 crore for the other sectors, excluding jute--may be required in the second quarter of the FY24, according to the BB letter.

During the first quarter (July-September) of the FY24, a total of Tk 1,500 crore as incentives was estimated. Of the total, Tk 1,400 crore was disbursed to the general export sectors and Tk 100 crore to jute and jute products sector. However, Tk 206.19 crore has not yet been undisbursed for FY23.s

In the budget for FY24, Tk 1,10,672 crore has been kept aside as subsidy. It includes subsidies, incentives, loans and advances. Incentives, loans and advances are considered as subsidies.

In the budget, Tk 84,002 crore has been allocated as subsidies on fertiliser, electricity and other sectors while Tk 15,225 crore for cash incentives and Tk 11,470 crore for state-owned non-financial corporation.

In FY23, the subsidy allocation was Tk 82,745 crore but it was increased to Tk 98,984 crore in the revised budget for that FY.

In the budget for FY24, the government has allocated Tk 15,225 crore as incentives. Of the total, Tk 1,200 crore has been allocated for the jute sector and Tk 6,200 crore for inward remittance. A significant portion of the remaining amount will be disbursed as cash assistance to the export sector.