The FBCCI, the country’s apex trade body, has lauded the proposed budget as realistic and implementable, adding the caveat that the implementation of the budget would hinge on political stability, good governance, and rule of law. The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), however, pointed out that too much reliance on bank borrowing, for financing the budget, might hinder investments in the private sector.
“Many termed the budget as ambitious, but, we think both the size and provisions of the budget are good”, said FBCCI president Kazi Akramuddin Ahmed, on Saturday, while addressing a press conference on the reactions of the business community, to the proposed budget for the fiscal year 2013-14.
“The most important thing is the quick execution of the proposals through efficient management,” said the FBCCI chief.
Ahmed also pointed out that past budgets were also ambitious, projecting high growth. The targeted 17 per cent rise in revenue collection this year was realistic, as it had risen by 22-24 per cent earlier, he explained.
A strong monitoring system and a corruption-free society were also very important to implement the budget proposals, he observed.
The FBCCI president sais that there was no alternative to a lavish budget for the economic development of a country, with a population of 160 million.
“The government’s failure to implement the budget would be the worst side of this year’s budget proposals,” he said, responding to a query regarding the negative sides of the budget.
He thanked the finance minister and the 14-party alliance government for considering various demands and issues raised by the FBCCI, in the proposed budget.
Given that the duty for importing raw materials and intermediary goods had been reduced, the local industrial products would be competitive in the international markets and there would be more investment inflow, he said.
He admitted that implementation of the budget would be challenging for the government owing to the political volatility of the country. Dwelling on the government’s proposed bank borrowing of Tk. 25,992 crore, to meet the 4.6-per cent deficit of the newly announced national budget, the FBCCI chief said that dependency on bank borrowings, to a large extent, would create a crowding-out effect in credit flow, to the private sector.
He also emphasised the need for financing in the productive and development-conducive projects of both the government and the private sector to lower this reliance on bank borrowings.
He also called upon the government to face the challenge, by ensuring investment in the public and private sectors, by adequate money supply management.
The FBCCI chief, however, was a little critical of such budget proposals, as keeping the provision of whitening the black money only for purchasing plots and flats, reducing the import duty for biscuits and raising the amount of package VAT for small businesses.
According to him, the money invested in the housing sector would not encourage overall investment in the country. Opposing the increasing of package VAT for small businesses to Tk. 12,000 in the proposed budget from the existing Tk. 9,000, the FBCCI chief said the amount at best could be Tk. 10,000, as the small business owners had been seriously affected by the recent political events.
As the new budget would face an election, political stability would be a key factor for the proper implementation of the budget, he said.
Due to the country’s recent political instability, economic activities had been hindered and investment, production, export and import had also been adversely affected, he added.
Akram also lauded the government for increasing the turnover tax limit to Tk. 80 lakh, from the present Tk. 70 lakh, for increasing the limit of investment on plant, machinery and equipment for small and medium-size enterprises to Tk. 40 lakh, from Tk. 25 lakh, and for raising the limit of annual turnover to Tk. 60 lakh, from Tk. 40 lakh. He also hailed the government for imposing no import duty on imported essential consumer goods, agro elements, life-saving medicines and cotton.
Akram thanked the government for proposing zero import duty on the poultry machinery and accessories, and artificial filament tow used in the textile industry.
FBCCI vice-president Helal Uddin and other directors and chamber leaders were present at the conference, which was held at the FBCCI conference room.
-With The Independent input
