Mashiur Rahaman

Leather industry leaders' expressed disappointment over the proposed budget as they see no sign of government promised stimulus package in it to help overcome the recession hit sector.

"The proposed budget is disappointing, said the chairman of Bangladesh Tanners Association (BTA) Shahin Ahmed adding that their recession compensation appeal has been ignored by the government.

"Government's promised stimulus package implementation for the recession hit leather industry has not been reflected in the proposed budget," chairman of Bangladesh Finished Leather, Leather Goods and Footwear Exporters' Association Rezaul Karim Ansari claimed.

Talking to the FE, BTA chairman said the government assured of marginal import duty reduction over essential chemicals used in the leather industries. But the budget announcement has disappointed us, he added.

"All we have witnessed in the budget is two per cent import duty reduction on chemicals and increase of 2.5 per cent cash incentives on the export of finished goods. This is far below our expectation," he added.

In order to patronize the 87 per cent value added leather industry in the face of global financial recession, the government pledged reducing import duty on essential chemicals used in this sector. Government also promised to consider bringing down the bank interest rates to its bottom to give the sector a much needed lift, Mr Shahin Ahmed elaborated.

Moreover, the 25 per cent cash incentives against the export of craft and finished leather goods that was promised as part of stimulus package announced by the government, remained inaccessible to the industry leaders. The budget mentioned nothing specifically, he added.

He also said, the only positive aspect witnessed in the budget is imposition of import tax over imported finished leather goods and Rexine," the BTA chairman told the FE.

Imported finished leather goods like shoes, particularly from China, have threatened our local shoe industries. This would give our 4500 local shoe industries a chance to recapture the market, Shahin Ahmed added.

Explaining the industry situation, Rezaul Karim Ansari said that the leather industry is 95 per cent export oriented, which have been the single most affected sector in Bangladesh by the global financial recession.

"Recession has already eroded 40 per cent of our export earnings. If not now, then when would the government help us ?," he questioned.

He urged the government to implement all that has been promised and demanded making them clear before finalising the budget 2009-10, Rezaul Karim Ansari added.