Dhaka: The anti-graft campaign by Bangladesh's interim government coupled with increased import duties have resulted in negative growth in investment in manufacturing activities in the emergency-ruled country, a Central bank report said.

The anti-corruption drive of the government that has led to the incarceration of several prominent businessmen is one of the reasons for sluggishness in investment in capital machinery, the New Age said quoting a report prepared by a central bank.

It said the jute sector saw the biggest decline in machinery demand following the closure of a number of public sector jute mills. The analysis of the central bank, based on the import statistics of capital machinery for seven key export sectors, was sent to the chief adviser's office recently with analysis of the import trends and the reasons for negative growth in investment on capital machinery.

Capital machinery imports during the July-November period registered a 4.03 per cent negative growth compared to the corresponding period of the previous fiscal year.

Imports of capital machinery for all seven Manufacturing sub-sectors -- textile, leather/tannery, jute, garment, pharmaceutical, packaging and miscellaneous declined markedly, the report pointed out.

Increases in customs duties on capital machinery and intermediate goods in the 2007-08 fiscal budget also contributed to the negative growth in investment in capital machinery.

The increase in customs duty from five per cent to 10 per cent on capital machinery and from 12 per cent to 15 per cent on intermediate goods played a negative role in capital machinery import, said the report.

Source : PTI