Dhaka, Bangladesh (BBN) - The second stimulus package for development of the export sector came into effect on Tuesday – more than six months after the government announced financial and policy supports for exporters.

The central bank issued a circular in this connection on the day and asked the commercial banks to take necessary measures to implement steps adopted in the package for the development of the export-oriented sector, particularly textile.

“We’ve issued the circular in line with the finance ministry’s advice,” a senior official of the Bangladesh Bank (BB), the country’s central bank, said, adding that the exporters would be benefited from the stimulus package.

On November 25 last year, the government announced a series of additional fiscal and policy stimulus packages worth over BDT 10 billion for the export sector to offset bad impacts of global recession from the domestic economy.

President of Bangladesh Textile Mills Association (BTMA) Abdul Hai Sarker said that the exporters might be benefited more if the circular was issued earlier.

Under the package, exporters will receive 5.0 percent cash incentives for new export destinations for three years while all export destinations, except the USA, EU and Canada, will be considered new ones.

The exporters will get 5.0 per cent cash incentives in the first year, 4.0 per cent in the second year and 2.0 per cent in the third and final year.

Members of the BTMA will receive this facility only for direct export of yarn, according to the circular.

The government has also announced to provide a special benefit to small and medium enterprises (SMEs). Companies that exported goods worth up to $3.5 million in FY2008-09 will be brought under the SME category.

Such SMEs will receive 5.0 percent more cash incentives if they have already received the same amount of subsidy or their plea is under consideration for the fiscal 2008-09.

Besides, the SMEs in the textile sector, that do not have their own captive generators, will get rebate on 10 per cent of their electricity bills up to June 30, 2010 but the facility is subject to some conditions including submitting the bills of electricity to the central bank.

BBN/SS/SI/AD-10June10-10:06 am (BST)