Undeniably, any promotional financial support given to businesses by the government is drawn from the public exchequer. Notably, the government had set aside funds to be provided as incentives to certain industries in the export sector. The beneficiaries included industries that could export traditional or new items to newly discovered markets or could export new products to old markets. The move was part of the government's emphasis on diversifying both the exportable items and export markets. So far there was no problem. According to the government's order to this effect issued by the finance ministry's Monitoring Cell (MC), the cash incentives were available for 29 months between February 2020 and July 2022.
But there was some confusion in the order issued by the MC as to which markets should be considered as new. As for example, the UK as part of the European Union (EU) has been an old export market for Bangladeshi products. So, there was no reason why the country's exit from the EU following Brexit in January 2020 should change its status to a new export market. And even from historical point of view, the UK has been an old export market for our goods since Bangladesh's independence. Strangely though, as reported in this paper on Wednesday, the MC's order related to the said export incentives treated UK as a new export market until July 2022. Far from questioning it, some exporters have taken full advantage of the definitional flaw centring new markets in the MC's order and been claiming the 4 per cent cash incentives for their exports to the UK market.
The MC's questionable narrative about UK market came to the notice of all concerned, thanks to the audit conducted by the office of the Comptroller and Auditor General (CAG) two years later. Even after CAG in a letter informed the central bank of the discrepancy, the latter, rather than taking prompt action by way of asking commercial banks to stop activities regarding providing cash incentives to the exporters, went for the tardy option of seeking finance ministry's directive on the matter in July this year. On the other hand, the MC in an explanatory note issued on September 22 to the Bangladesh Bank's governor this year, redefined the status of UK and other markets (including the US, Canada and EU) as old markets and disqualified exporters as recipients of any cash incentives from their exports to those markets during the period in question. And this revised order would be effective from July 01, 2022, the note further added.
Evidently, the realisation has come too late. For, already, during the 29 months' bounty period from February 2020 until July 2022, the government might have lost around TK 27 billion to the bills paid as cash incentives to the exporters (mostly in the apparel sector). Now, what about the possible losses caused to the government exchequer meanwhile? In this context, provisions are said to be in existence in the finance ministry's guidelines as well as the relevant circular of the central bank that any cash incentives advanced to the exporters could be taken back under certain conditions. That notwithstanding, someone must accept responsibility for the potential loss of public money due to the referred to omission or commission in the government order involving exporters' cash incentive. For all concerned owe it to themselves to answer for any misuse of public fund to the nation.