Spinning mills, apparently affected by the global financial crisis, have reported Tk 30,000 crore worth of yarn in unsold stocks.
Leaders of Bangladesh Textile Mills Association (BTMA), led by its President Abdul Hai Sarker briefed Finance Minister AMA Muhith yesterday on the primary textile sector and sought a stimulus package from the government to overcome the situation.
Most spinning mills are facing a serious liquidity crisis, as a huge amount of yarn remains unsold, according to BTMA, a trade body of the primary textile sector.
"As yarn could not be marketed, the mills cut their production by 30 percent," BTMA said in a presentation.
If the situation goes unchecked, a large number of workers will lose their jobs at the mills and the number of loan defaulters would increase, BTMA leaders said.
Under BTMA, there are 1,150 mills, including spinning, dyeing and finishing factories, which have an investment of Tk 40,000 crore.
Organisations directly linked to the textile sector, such as bank, insurance, transport, energy and industries, will face a disaster, they warned.
BTMA made a series of demands, including a hike in cash subsidy to 15 percent from 5 percent, deferring term loan repayment and freezing of interest for two years, formation of research and development fund and devaluation of the taka against the dollar.
After the meeting, Sarker told reporters that India, Pakistan and China have announced different incentives for the sector to keep it competitive in the world market.
"Bangladesh should also give incentives to the sector," he said.
Muhith told reporters: "I have listened to them. We have not yet taken any decision. A decision will be taken after scrutinising all aspects of the issue."
On the devaluation of money, Muhith said a decision on whether or not to devalue the taka would be taken in consultation with all business groups.