Liquidity glut proves economic malaise

Muhith tells JS; laments TIN defaulters
Finance Minister AMA Muhith yesterday admitted in the Jatiya Sangsad (Parliament) that the increase in liquidity means that the economy of the country is not operating properly.
Replying to a supplementary raised by Awami League legislator from Bogra Abdul Mannan during the question-answer hour at the Jatiya Sangsad (JS) session chaired by Deputy Speaker Shawkat Ali, the Finance Minister said the global economic meltdown has caused stagnancy in investment. He, however, hoped that there would be a positive change in the situation at  year-end.
AMA Muhith added that investment in the country is being hampered due to crisis in power and energy sectors and the economy would be revamped after introduction of the People Public Participation (PPP) programme in investment later in the year.
Responding to a question of Jatiya Party lawmaker HM Golam Reza, the Finance Minister said there is a possibility to announce the new pay scale for government employees shortly, which would be in consistent with the basic needs for livelihood of the employees and will also enhance their social status and worth.  
Responding to a star-marked question of Apu Ukil of the ruling party, AMA Muhith said the government has introduced stimulus package in May and it entered implementation phase instantly for the local industries to offset the adverse impact of the global economic recession. He added that the stimulus package is now fully being implemented.
To a supplementary of Shahiduzzaman Sarkar, the Finance Minister said the investment in the country is being hampered due to crisis in power and energy sectors, not for high interest rates in lending. He added that the government has no plan immediately to reduce bank interest rates as the sick industries could be made viable if management cost could be reduced.
Responding to a question of Awami League lawmaker, Meher Afroze Chumki, the minister said a total of 48 commercial banks are now operating in the country, which included four state-owned and five specialised, 30 private and nine foreign banks. 
Giving a statistics while replying to a question of Sheikh Afil Uddin of Jessore-1 constituency, AMA Muhith said the total amount of deposits in the state-owned commercial banks was Taka 83,992.01 crore till June and the total amount of loans and advances was Taka 49,501.58 crore and the rate of loan deposit was 58.94 per cent.
On the other hand, AMA Muhith said the total amount of deposits in the private commercial banks was Tk 1,60,015.84 crore and the total amount of loans and advances was Tk 1,38,776.39 crore and the rate of loan-deposit in the private commercial banks was 86.73 per cent.
 The difference in loan-deposit between the state-owned commercial banks and the private commercial banks was 27.79 per cent, the Finance Minister said. He added that the common people are conducting more transactions in the private commercial banks at higher interest rates despite the fact that the loan interest rate is less in the state-owned commercial banks.
The Finance Minister informed the House that the government has taken initiatives to establish Expatriate Welfare Bank, a specialised bank, and it (government) has a plan to establish a bank through the sponsorship of the Non-resident Bangladeshis (NRBs). 
AMA Muhith, replying to a question of ruling party lawmaker Jobeda Khatun, said the country has now 23 lakh income tax payers, who have TIN against their names, but only seven lakh of them submit income tax returns regularly. He said that a survey programme is going on from July 16 to increase the number of income-tax payers and the programme would be launched in different parts of the country in phases.
The Finance Minister added that the government was actively considering to constitute the National Tax Tribunal and it has a plan to appoint district judges in the tribunal.
He added that growth has increased due only to income tax returns by the tax payers in July as the government has provided some incentives and benefits to them.
AMA Muhith said the income tax has been fixed on the basis of universal self-assessment for the taxpayers’ benefits and for the purpose one-stop service has also been opened.
To a question of Shah Zikrul Ahmed of Jatiya Samajtantrik Dal from Brahmanbaria, the minister admitted that there were allegations of harassment of the taxpayers by the income tax officials in many districts.   
Replying to a question of Begum Tahura Ali, he also informed the House that the government has taken decision to circulate new currency notes and coins inscribed with the photograph of Father of the Nation Bangabandhu Sheikh Mujibur Rahman.
To a supplementary of Md Shafiqul Islam, AMA Muhith said the government has no plan to reduce the interest rate on agriculture loan from eight per cent at the lowest and 13 per cent at the highest. Only two per cent interest rate is charged on spices and pulses, he added.
He replied to a question of Talukdar Mohammad Yunus by saying that the government had ordered not to realise agriculture loans from the farmers who were affected by cyclones Sidr and Aila in the coastal areas of the country, but it has no plan to write off agri-loans.  
The Finance Minister, replying to a supplementary of Gazi Golam Dastagir, said, it is not possible to reduce interest rate on fixed deposit schemes by order in our country as many people usually depend on the interest rates on their fixed deposits.
Post and Telecommunication Minister Rajiuddin Ahmed Raju informed the House that the Bangladesh Telecommunication Regulatory Commission (BTRC) has earned Tk 3195.37 crore as revenue from the telecommunication sector in the 2008-2009 fiscal, which was Tk 647.46 crore above the target.
Replying to a question of ruling party legislator from Kishoreganj Md Mujibul Huq, he said that against a target of Tk 2100.46 crore in the sector, the BTRC earned Tk 178.70 crore as revenue in two months of the current fiscal year. Besides, the minister added BTCL earned Tk 579.90 crore more than the target in the 2008-2009 fiscal, and in the last fiscal year the earning was Tk 2079.90 crore against a target of Tk 1500 crore.
 Responding to a star-marked question of Mahmudus Samad Chowdhury of Sylhet, Rajiuddin Ahmed Raju denied any allegation of harassment of clients involving Western Union through which expatriates send their remittances. He said he has heard of first such an allegation. He said expatriates sent home a total of Tk 53,21,84,921 through the postal department in 2008-2009 fiscal.
To a supplementary of Tanvir Shakil Joy of Sirajganj, the minister said the government has taken initiatives to modernise the postal department by setting up ATM booth and courier service at GPO and bringing the post offices in remote areas under internet facilities.

Courtesy of The Independent