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Fresh stimuli package soon

Published : 27 Dec 2020 09:31 PM | Updated : 28 Dec 2020 07:11 PM

The government is going to declare fresh incentive package to keep the economy afloat as the second wave of the Covid-19 pandemic has already begun.

Economists termed such initiative of the government a time-befitting and smart one.

But they opine that the new stimulus package needs to be more neatly planned so that economy gets a fresh shot in the arm during the crisis.

Work has already begun to implement new incentives, a senior official of the Finance Ministry said. 

Incentive package implementation strategies are being redesigned to expand facilities to export-oriented industries and services, rural economy, damaged cottages, small and medium enterprises, he added. 

The Financial Institutions Division of the Ministry of Finance is working on a policy for the cottage, small and medium industries sector, he informed. 

Besides, the loan facility of the incentive packages implemented through Bangladesh Bank is continuing in the current year and it will go on till 2022 as well, he said.

There is a plan to disburse loans of Tk 257,250 crore under the package, he added. 

However, Prime Minister Sheikh Hasina has already announced incentive packages of Tk 120,153 crore for 21 sectors previously to protect those from recession amid the Covid-19 pandemic.

Ninety percent of the incentives have been disbursed till December, the officials said.

A Bangladesh Bank official said customers who did not get loan from the incentive package at the beginning of Corona will be able to avail loan facility in the coming years. 

In such a case, any customer will get the facility of interest subsidy from the government only once, he added. 

Md Serajul Islam, executive director and spokesperson of Bangladesh Bank, said Corona may have an impact in the years to come. 

“Due to this fear, the term of the original funds may have been extended to three years. This will create opportunities for more people to get loans,” he added.

Prof Mustafizur Rahman, economist and a distinguished fellow of the Centre for Policy Dialogue (CPD), said, “Even though there was an allocation for the SME sector, people could not take the incentive loan in the real sense due to the bank's collateral and some other stringent conditions. But they needed urgently this incentive much more.” 

He suggested that the terms and conditions for the SME sector should be relaxed in the new incentive package, so that SME entrepreneurs can easily avail of the incentive. 

Besides, it is necessary to ensure that the real marginal farmers get the incentives in the agricultural sector, he said adding that we need to increase monitoring of low-income people for providing incentive.

Zahid Hussain, former lead economist of the World Bank, said, “The real beneficiaries in the social security sector have to be ensured to keep the wheel of the economy moving. Providing one-time assistance from the budget for small and medium enterprises is needed to keep the economy vibrant.”

After the second wave of the Covid-19 pandemic across the world, the government has held several meetings with prominent economists, researchers, heads of multinational organisations in Dhaka and different ministries to frame strategy for speedy implementation of the stimulus package, another senior official of finance ministry said.