BUDGET FY 2013-14
Government may ignore economic, political realities: CPD
The Centre for Policy Dialogue has said it anticipates that the government is going to formulate a budgetary framework for the next fiscal year ignoring economic and political realities.
The new government which is expected to take charge at the beginning of the next year might face huge challenges in implementing the national budget for FY 2013-2014, it said.
‘It is anticipated that the proposed fiscal framework will be formulated ignoring economic and political realities existing in the country. As a result the new government may face considerable challenges while implementing it,’ CPD observed in its analytical review of macroeconomic performance in FY 2013.
At a news briefing on its second analytical review of macroeconomic performance in FY 2013 at its office on Monday, the CPD officials also recommended consolidating the macroeconomic targets for the next fiscal year emphasising on proper management and keeping the reality in mind. Otherwise the possible problems could not be avoided, it said.
There is no economic sense in setting up macroeconomic targets at an overambitious level, it said.
‘The government should also set the target of growth rate of gross domestic products near to the reality and needs to improve the quality of public investment and facilitate the private investment for achieving the target,’ CPD executive director Mustafizur Rahman said at the briefing.
According to media reports and statements of the finance minister and other policymakers, the government will set a target to reduce subsidy by 25 per cent but it may not be achieved and bank borrowing may be increased, he said.
Mustafiz said that the revenue collection target was set at Tk 1,36,000 crore for the FY 2013-14 which was 21 per cent higher than that of last fiscal year.
The government has set the higher target at a time when it is likely to fall short of target at around Tk 3,000 crore to Tk 4,000 crore in the FY 2012-13, he said.
The budget deficit is expected to be about 4.8 per cent of the GDP. The government may aim to bring down the bank borrowing from the level of FY 13 to finance the stipulated deficit that means foreign financing will have to rise significantly, he said.
The CPD, an independent think-tank, also said that ongoing political impasse and the resultant adverse
implications would leave an unfavourable shadow for economic performance over the upcoming fiscal year.
‘Overall Bangladesh economy is likely to remain in a difficult terrain in the next fiscal year,’ it said.
For better management of macroeconomic scenario in next fiscal year, the CPD suggested the government consolidate of public expenditure to the
extent possible, prioritise implementation of long-list of carry over projects and projects with aid components under annual development programme and emphasise on revenue mobilisation.
It also emphasised on creating conducive environment for private investment by ensuring both economic and political assurance and restoring good governance and confidence in the banking sector.
-With New Age input
