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New stimuli focus on SME

Published : 03 Jan 2021 09:51 PM | Updated : 16 Mar 2021 06:16 PM

The government is going to announce fresh incentive package next month focusing more on small and medium-sized enterprises (SMEs) sector to ensure creating huge employments opportunities.

Besides, the government is eyeing a mega budget for the next year 2021-2022 aiming to rejuvenate the country’s financial sector for ensuring sustainable economic growth.

 A Finance Ministry official said, “We are preparing new incentive package for recovery of our country economy and ensure sustainable growth by giving more supports for business people especially who were affected more due to Covid-19 pandemic.  

This initiative will help entrepreneurs to recover from their losses caused by the coronavirus crisis to keep the economy afloat as the second wave of the Covid-19 pandemic has already begun, he added.

Bisides, the finance ministry is going to propose a huge budget of more than Tk six lakh crore for the next fiscal for boosting the economy and creating huge employments, he mentioned.

The government is going to focus particularly on health, education and employment to ensure sustainable economic growth, he added.

A meeting of the Co-ordination Council was held last week to finalise the draft of various aspects of the current and next budget as well as new stimulus package, he said.

Finance Minister AHM Mustafa Kamal chaired the virtual meeting from abroad.

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

But they suggested that the new stimulus package needs to be planned more neatly so that economy gets a boost despite the corona crisis.

Meanwhile, work has already begun to implement the new incentives, another 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.

Read More: Fresh loan facility for CMSMEs

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

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, they added.

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.” 

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 the incentive. 

Read More: Bangladesh-India SME business scope to expand