Offer a new stimulus package for CMSMEs: CPD

The Centre for Policy Dialogue has suggested that the government should offer a new stimulus package along with tax exemptions on trade turnover for cottage, micro, small and medium enterprises to help them recover from the Covid-19 pandemic economic fallout.

The independent think-tank made the suggestion while sharing their observation at an event – An Analysis of the National Budget for FY2021-22 – in the capital on Friday.

“The initiatives in support of SMEs in the proposed budget do not meet and match the expectations. They have been suffering from credit crunch while the first stimulus package is already near the end of its disbursement,” CPD Executive Director Fahmida Khatun said in her keynote presentation.

Earlier on Thursday, Finance Minister AHM Mustafa Kamal placed his Tk 6,03,681 crore proposed budget for 2021-22 fiscal year before the parliament.

In the proposed budget for FY22, the government proposed a tax exemption for female entrepreneurs with turnover up to Tk 70 lakh and waived 1 per cent import duty on capital machinery imports.

“Along with the proposed tax cuts for SMEs, a new stimulus package should be designed to provide money in their hand and assist them in salvaging their business during the ongoing crisis,” said Fahmida.

Meanwhile, CPD Research Director Khondaker Golam Moazzem suggested that the stimulus package for the sector should be raised to Tk 50,000 crore.

“Only tax rebate would not be enough for the CMSMEs as they are going through working capital shortage. If they get funds at low rate, they will be able to move for production in full-swing,” he said.

The think-tank also opined that tax exemption will increase investible surplus which may encourage investment and promote women entrepreneurship.

On the other hand, 1 per cent import duty exemption on import of capital machinery to small and medium enterprises, irrespective of commercial and industrial establishments, will reduce cost of machineries and have positive implication for enhancing rate of return, it added.