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The Financial Express

Businesses welcome stimulus package, stress on monitoring

FE REPORT | Published: April 06, 2020 08:46:20 | Updated: April 06, 2020 15:58:55


A representational image. — FE Photo A representational image. — FE Photo

Country's business leaders and trade bodies have welcomed the stimulus package announced by Prime Minister Sheikh Hasina on Sunday.

Dhaka Chamber of Commerce and Industry (DCCI) president Shams Mahmud welcomed the government's announcement about financial assistance for different segments.

He said, "We welcome the initiative of financial assistance as we feel it gives an inclusive support picture by the government."

On the other hand, DCCI also welcomed the reported fund that Bangladesh Bank was working on to support our agro sector.

"We hope that companies and businesses with good track record of paying taxes and contributing to the growth story of Bangladesh will be given priority," he said.

He added: "This is a wakeup call for businesses outside the banking channels to come under the formal banking channel."

Mr Mahmud also requested mobile financial services (MFS) operators to reduce their service charges for six months as they had been selected as a mode of fund disbursement.

"We have seen a lot of proposals given by Dhaka Chamber reflected in the government's response especially to MSMEs," he mentioned.

He also hoped that the informal sector could also be brought into the schemes which would increase the safety net and give a wider inclusive assistance.

Welcoming the stimulus package announced by the Prime Minister to recover from coronavirus impacts, Business Initiative Leading Development (BUILD) chairperson Abul Kasem Khan termed it a 'timely and effective one'.

The stimulus package would build confidence among the business community as well as the general people about the country's economy, he told the FE on Sunday in an immediate reaction to the announcement.

Praising the government's Tk 727.5 billion stimulus package, he said: "Now a high-powered committee should be formed to ensure proper monitoring and distribution of funds."

Mr Khan also urged the government to conduct sector-wise impact analysis on a regular basis to have better outcomes of fund release.

Referring to an allocation of Tk 300 billion working capital for the COVID-19-affected industries and service sector institutions, he said, "Though BUILD has called for zero per cent lending rate for industries, the government's 4.5 per cent rate is encouraging too."

The execution of the fund should be free from corruption and strongly monitored, he added.

Mr Khan, also a former president of Dhaka Chamber of Commerce and Industry (DCCI), stressed the need for identifying the traders, especially in the informal sector, who manage their working capital from their own sources or outside the banking channel.

"Such businesses should get government assistance to recover from losses and the authorities concerned need to identify them through a transparent process so that no one is left behind," he said.

The BUILD chairperson also underscored the need for carrying out continuous survey and research to recognise most-affected businesses to release funds on a priority basis.

Prime Minister Sheikh Hasina announced a total financial package of Tk 727.5 billion, including previously-announced Tk 50 billion, in efforts to soften the possible impacts of the coronavirus on the economy.

FBCCI: The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) in a statement also welcomed the stimulus package. FBCCI President Sheikh Fazle Fahim said the package was "targeted and focused". He also said the stimulus package would help all the sectors.

"This stimulus package will be utilised in a targeted and focused way in micro, small, medium and large enterprises, and in agriculture, manufacturing and service sectors. Through an efficient implementation of the package, the economy will remain stable," Mr Fahim added.

MCCI: The Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) and the Bangladesh Employers Federation (BEF) have hailed the stimulus package announced by Prime Minister Sheikh Hasina on Sunday to help the businesses mitigate the impact of Covid-19.

They also sought a transparent and prompt plan of action for the implementation of supports announced by the Prime Minister.

Highlighting various features of the stimulus package, the MCCI and the BEF appreciated the priority given to the disadvantaged citizens, which is in line with the Prime Minister's firm commitment to the people of this country that no one will be left behind.

They said the creation of a Tk 300 billion fund under the package for large industries and Tk 200 billion fund for small and medium industries at 4.5 per cent and 4.0 per cent interest rates respectively are highly commendable steps.

Stressing the need for promptly and efficiently implementing these priorities, the MCCI and the BEF urged the policymakers to create a transparent mechanism free of red-tape under specific action programs to implement the support announced by the Prime Minister.

"Time is a vital factor here. It has been rightly indicated by the Hon'ble Prime Minister that the loan processing will be administered based on bank-client relationship. However, we strongly suggest that Bangladesh Bank expeditiously prescribe efficient modalities for banks to reduce the time for evaluation of applications and disbursements," said the statement.

They also suggested that there should be a public-private 'Task Force' (TF) to evaluate and monitor the credit management system based on bank-client relationship.

The government may consider other innovative approaches to boost the local consumer demand.

Besides, some special allocations may be made for boosting the local economy and reinvigoration of micro and small businesses which have already wound up during the crisis, or which will face an almost complete loss of the trade during Bangla Noboborsho and Eid, that account for 50-90 per cent of their yearly demand, they stated.

Mentioning Eid-ul-Fitr as a very important event for the local economy in terms of consumer spending across all categories of products and services, they said a slump in demand at this time could threaten their very existence.

Besides, judicious assessment will have to be made while identifying the actual sufferers who lost their means to survive like hawkers, rickshawpullers, vegetable vendors, dressmakers, small telephone and other repair shops, day-labourers, etc, it suggested.

"There is a missing middle group, who are low income and salaried persons who will suffer, in particular, from not being able to pay, for example, house rent. A solution may be designed to offset their immediate crisis in this regard," their statement said.

BTMA: In a separate statement, the Bangladesh Textile Mills Association also hailed the stimulus package announced by the Prime Minister.

The BTMA said the textile mills will benefit from the increased Export Development Fund (EDF) as has been offered in the announced stimulus package.

REHAB: Lauding the incentive package announced by the prime minister to address the impacts of coronavirus, the country's realtors on Sunday urged the government to allocate a sum for the sector as soon as possible.

The Real Estate and Housing Association of Bangladesh (REHAB) also requested the government to exempt them from paying interest on their loan from banks till December this year and reschedule it as soft loans.

A statement, on behalf of the REHAB board of directors and signed by its President Alamgir Shamsul Alamin, said the trade body welcomed the government's time-befitting measures to support different sectors.

"Real estate is the worst-hit sector due to the prevailing crisis as many other linkage industries are affiliated with it," the statement said, adding that any adverse effect on this sector involving 3.5 million employment, would beget severe crisis for other sectors, as well as the macro economy in the long run.

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