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PM unveils Tk 72,750 crore stimulus package to address coronavirus fallout

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06th-Apr-2020       
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Staff Reporter :
Prime Minister Sheikh Hasina on Sunday announced Tk 72,750 crore stimulus package to fight a downturn in the country that is currently locked down to stem the spread of the novel coronavirus.
The package offers cheap loans to distressed companies, businesses and export-oriented industries, which have been hurt the most by the lockdown, and direct cash transfer and food security measures to millions of poor people hit by the lockdown.
"Earlier, I announced a Tk 5,000 crore (emergency) incentive package for paying salaries and allowances of export-oriented industries' workers and employees, and today I am announcing four fresh financial stimulus packages of Tk 67,750 crore," Sheikh Hasina said while announcing the package through a press conference at her official Ganabhaban residence in Dhaka around 10:05 am.
With the fresh allocations, the total amount of financial assistance from the government would be Tk 72,750 crore, which is nearly 2.52 per cent of GDP, she said.
On March 25, the Premier announced a Tk 5,000 crore package for the industries engaged in export business.
The PM said that the government simultaneously took four programmes under the plan to be implemented in phases categorised as "immediate, short and long."
The four programmes are increasing public expenditure, formulating a stimulus package, widening social safety net coverage and increasing monetary supply.
The first of the four packages, involving Tk 30,000 crore, will be given to affected industries and service sector organisations as working capital through banks as low-interest loan, she said.
Commercial banks would provide the amount as loans from their own funds to concerned industries and enterprises on the basis of bank-client relations, she added.
"The interest rate of this lending facility will be 9 percent. Concerned industries and business organisations will pay 4.5 percent interest, while the government would pay the remaining half to banks as subsidy," she said.
Under the second package, small and medium enterprises, including cottage industries, would get Tk 20,000 crore as working capital.
"The interest rate of this lending facility will be 9 percent and the concerned industries and business organisations will pay four percent interest, while the government will provide the remaining five percent as subsidy," the PM said.
The third package, she said, is meant for enhancing Bangladesh Bank's Export Development Fund -- from $3.5 billion to $5 billion -- to facilitate raw material imports under back-to-back LC.
The Prime Minister said under the fourth package, the central bank will introduce a new credit facility of Tk 5,000 crore as "Pre-shipment Credit Refinance Scheme" and its interest would be seven percent.
"The entire package is expected to prevent job losses, keep economy afloat and alleviate the difficulties currently being faced by the poor and the distressed," she added.
She said that local products alongside the export sector would deserve special attention to cope with the possible global and domestic economic crisis caused by the pandemic.
Generating employment will be given priority in public expenditure while foreign tours and lavish expenditure will be discouraged.
Some low interest credit facilities will be launched through the banking system mainly to rejuvenate the economic activities, keeping the job of the workers and employees as well as the competitive edge of the entrepreneurs intact.
The coverage of the existing social safety net would be further widened to fulfil the basic needs of people living below the poverty line, day labourers and people who are engaged in non-formal works.
Notable programmes are distributing food materials free of cost, selling rice at Tk 10 per kg, distributing cash among targeted communities, widening the coverage of old-age allowance, widow allowance and for the women oppressed by husbands at 100 most poverty-prone upazilas of the country, she said.
The Prime Minister said the fast spread of coronavirus, huge pressure on health services, unprecedented lockdown and stagnant communication to curb the pandemic have already started putting negative impact on the global economy.
She hoped that the country's economy will bounce back if the stimulus packages are implemented quickly. "And we'll be able to go to close to the desired economic growth, Inshallah."
The Prime Minister also put emphasis on giving special attention to local products beside the export-oriented sector to overcome the possible global and domestic economic crisis.
In this connection, the Prime Minister urged all to increase production and the use of local products.
She said taking opinions of all concerned, the government has taken various types of steps. "So, there'll be no problem in the future. All can run their business properly. I don' not see that anyone will undergo sufferings," she said.
Sheikh Hasina mentioned that it is the responsibility of the government to ease people's sufferings. "That's why we've announced the packages. All will get their facilities," she said.
But, the Prime Minister again warned against corruption and irregularities in implementing these packages. "I just want that all will do their work with honesty. Don't indulge in any type of corruption, irregularity and misuse," she said.

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