Economists at a pre-budget discussion on Saturday urged the government to prepare a realistic budget with more focus on employment generation schemes, education and health.
They also suggested the government that it should enhance direct tax and reduce dependency on borrowings from the local sources to meet budget deficit.They observed that political situation had not improved after the lop-sided general elections on January 5.
They further observed that without improvement of the political situation, the existing sluggish investment scenario would not get better.
The Economic Reporters’ Forum organised the discussion at the Dhaka Chamber of Commerce and Industry in the capital ahead of the national budget for the financial year 2014-15 to be announced in the first week of June.
Former caretaker government adviser Mirza Azizul Islam said there should be credibility of the national budget. He said, ‘The size of the budget should not exceed Tk 2,32,000 crore.
The finance minister has already announced that the size of the upcoming national budget would be Tk 2,50,000 crore. ‘If it goes up to Tk 2,50,000 crore, it will be a papery budget, not a realistic one,’ said Mirza Aziz.
‘To halt the falling investment the government needs to remove the political uncertainty,’ Mirza Aziz said.
He said the government was mortgaging the nation’s future by borrowing heavily from the local sources.
Former Bangladesh Bank governor Saleh Uddin Ahmed said the government should end the practice of announcing an incremental budget every year.
He said, ‘The sectors which performed well should get more focus in the new budget.’
Saleh Uddin said the allocation for the health and education sectors should be increased while the weakness in the financial management should be checked.
The financial mismanagement hurts the real sectors, he said.
Economist Qazi Kholiquzzaman Ahmad said the employment situation was worrying.
He said 33 per cent workforce was half-employed while the number of educated unemployment was soaring.
‘The problem is ticking like a time bomb,’ he said.
He said they found 8,000 educated persons applied for 21 jobs in a non-government organisation and 52,000 for 76 posts in a bank recently.
He observed that employment-friendly schemes should be given more focus in the next budget despite the risk of inflation.
Some of the speakers highlighted the country’s growth in the outgoing fiscal year and the country’s progress towards a middle income country by the end of this decade.
Debapriya Bhattacharya, distinguished fellow of the Centre for Policy Dialogue, said everyone except the government was saying that the growth would be less than six per cent, the lowest in the last one decade.
He observed that the private sector investment has marked a serious decline
‘The country is going through investment-barrenness. It started much before the political unrest that started in mid last year,’ he said.
He said the investors do not keep confidence in the government’s budget target as in most of the cases those are not taken up on realistic basis.
He said there has been no sign of economic recovery after the recent general election.
Debapriya said without decentralisation of the power qualitative change in the budget making was unlikely.
Former Federation of Bangladesh Chambers of Commerce and Industry president Abdul Awal Mintoo said the idea of the middle income country should be specified.
He said many fiscal targets remained unfulfilled.
The political situation is unhealthy, he added.
Binayak Sen, a research director of the Bangladesh Institute of Development Studies, said a middle income country is free of extreme poverty and malnutrition.
He said that the county should not obsess with the middle income idea.
A middle income country with poor political background faces lot of problems, said Binayak.
FBCCI president Kazi Akram Uddin Ahmed, Bangladesh Garment Manufacturers and Exporters Association president Atiqul Islam and DCCI president Shahjahan Khan also participated in the discussion.
Atiqul Islam said there should be allocation for apparel exporters in the new budget so that they could relocate their factories.
He said 17,500 workers lost jobs due to the recent factory inspection by foreign buyers.
Shahjahan Khan said they were very concerned with a big budget as it increases the risk of higher tax on the businessmen.
-With New Age input
