Leaders of the Bangladesh Textile Mills Association (BTMA) demanded 15 percent cash incentive for exports in 2005-2006 budget for the primary textile sector to facilitate its development.

The Financial Express Tuesday quoted BTMA chairman MA Awal as saying that if the country wants to survive in the competitive post Multi-Fiber Arrangement (MFA), there is no alternative to cash incentive in this sector.

He said many neighboring countries including India and Pakistan have been giving incentives for developments of their local primary textile sectors.

India has already disbursed a grant worth 220 billion rupees (5.11 billion US dollars) earmarked for its Technology Upgradation Fund Scheme in addition to normal interest subsidy of five percent and a capital subsidy of 10 percent to the textile sector.

He urged the government to make arrangement for duty free import of dyes and chemicals and to keep the tax holiday option for the textile sector in the upcoming budget for 2005-2006 fiscal.

He also asked the government to fix five percent corporate tax instead of 15 percent in the budget proposal.

The BTMA leader argued that the knit garment exporters of the country have been targeting to export products worth 3.0 billion dollars this year and it has become possible only due to the development in the primary textile sector.

If the government does not provide the facilities to primary textile sectors like spinning, woven and yarn the knit sub-sectors might face a blow, Awal warned, adding that the target of achieving seven percent growth of gross domestic product would not be possible if the government does not facilitate the textile sector.

The number of spindles in the primary textile mills of the country increased to 4.2 million, or up 200 percent, in 2004 compared to 1.4 million in 1994.

In 2004, the foreign exchange retention by primary textile sectors was 770 million dollars, which was minimal in 1994 calendar. The value addition of the sector also increased 75 percent in 2004 compared with its 25 percent in 1994.

Source: Xinhua