The government has asked the central bank to include the pandemic-hit tea industry in its fiscal stimulus package as the sector has been facing severe financial crisis in the wake of the Covid-19 outbreak.
To this effect, the finance ministry has sent a letter to the Bangladesh Bank (BB) to take necessary measures for including the sector in the working capital facility for the affected industries and services sector organisations or stimulus package for supplying working capital to small (including cottage industries) and medium industrial enterprises.
The fund sizes of industries and services sector and small and medium industrial enterprises are Tk 330 billion and Tk 200 billion respectively.
When contacted, BB spokesperson Md. Serajul Islam said, “The BB has received the letter recently. It is now working on the issue.”
The Covid-19 has put a negative impact on the tea sector. The cash flow and financial capacity of the tea industries have narrowed.
As a result, it is very difficult for the tea sector to continue production, pay wages, collect capital and maintain employments, industry insiders said.
Most of the tea companies will face trouble to pay bank loans in time this year, they added.
They also fear a long-term negative impact on the tea sector. They said it may not be possible for them to complete the development works of the sector with limited resources due to revenue deficit and non-payment of loans.
The sector has been facing multifarious problems including continuous price fall, unsold tea and inadequate rainfall, they mentioned.
Bangladesh Tea Association (BTA) last month requested the commerce ministry to bring the tea sector under the government’s fiscal stimulus package.
BTA has sought to provide additional working capital and create a special fund for the sector at 4.5 per cent rate of interest annually.
The tea sector is a prioritized industrial sector under the National Industrial Policy 2016.
When contacted, BTA chairman M. Shah Alam said, “We are trying to get required fund for the pandemic-hit tea industry under the government-announced stimulus package.”
“We have sent a letter to the commerce ministry, seeking fund for the sector last month,” he added.
The government should take positive decision urgently in this regard as the sector wants loan, not any financial assistance, from the government, industry insiders said.
Bangladesh produced around 96.07 million kilograms (kgs) of tea from 167 gardens in 2019 of which 95.209 million kgs were consumed locally.
Over 98,578 permanent and 29,666 temporary workers are involved with the tea industry. Of them, 50 per cent are women, according to BTA documents.
Around 0.5 million workers and their dependents are living in the tea gardens. Some 167 tea estates and tea gardens are registered with Bangladesh Tea Board.