Tk5,000cr stimulus barely enough to pay one month’s salaries of workers, employees in export-focused industries
The bailout package of Tk5,000 crore can meet only one month’s salary of workers and other employees in export-focused industries as the factory owners have to refund the amount in two years period with 2% interest.
Exporters say they must seek another stimulus package for paying two months’ salaries of their workers if coronavirus-hit global economic situation is not improved and normalcy returned back.
The amount will be transferred to workers’ and employees’ bank accounts or their mobile financial system (MFS) accounts by commercial banks, says an office order of the finance ministry, issued on Tuesday.
The Bangladesh Bank will channel the interest-free fund to commercial banks.
The order says the borrowing industry has to refund the money to bank concerned in 18 equal installments over a period of two years.
The industries will get a six-month grace period for repaying the low cost loan. The commercial banks will get the simple interest of 2% for their service, adds the order.
Industries that export minimum 80% of their products will be eligible for the fund to be used only for paying salaries to their staff.
The fund could be used to pay salaries up to three months, elaborates the finance ministry order.
However, industry people say the Tk5,000 crore will meet only one month’s salaries of their workers and other employees.
Asked, Bangladesh Garment Manufacturers and Exporters and Association (BGMEA) President Rubana Huq says their monthly salary is Tk 4,000 crore, as the sector contributes around 84% of the country’s total merchandise export.
According to sector people, BGMEA member factories employ around 40 lakh workers and other staff, while factories belonging to Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) employ another nearly 12 lakh people.
“Tk5,000 crore will meet only one month’s salaries of workers and employees at all export-oriented sector, including those in the apparel business,” Rubana said.
She, however, says if the corona-hit situation does not improve in the country and globally, they will seek bailout package equivalent to staff salaries of two months.
“Besides, we are in constant discussion with our buyers for payment against their import orders and apparel items already produced here,” Rubana said further.
When asked about further package and plan of the government to rescue industrialists, Habibur Rahman, Additional Secretary of the Finance Division, says the government will respond to the changing situation.
Prime Minister Sheikh Hasina on March 25 announced a bailout/stimulus package of Tk5,000 crore for export-oriented industries to fight the impact of coronavirus on the country’s economy.
In a televised speech to the nation, the premier said the money from the package could only be disbursed in the form of salaries and wages for employees and workers of the industries.
A senior official at BB says they will finalize lists of eligible banks by next week so that the commercial banks can begin disbursing money to factory workers by April 10 deadline.