Budget to eye 7.3 pc GDP growth: Muhith
Dhaka, Apr 10 (UNB) – Finance Minister AMA Muhith on Tuesday said the size of the next national budget would be around Tk 1.89 lakh crore eyeing a GDP growth of 7.3 percent prioritising agriculture, rural development, power and energy, and human resource development.
“The next national budget will be more strategic rather than financial,” he said while addressing a pre-budget meeting with economists at the Finance Ministry’s conference room.
He said the next budget would also target to contain the inflation rate within single digit from the existing double digit of over 10 percent.
The Finance Minister said special emphasis would be given on skill development and speeding up efforts for land digitisation in the upcoming budget alongside enhancing coordination among ministers to expedite implementation process of the Annual Development Programme (ADP).
Former Bangladesh Bank Governor Dr Farashuddin, CPD distinguished fellow Dr Debapriya Bhattachariya, executive director Prof Mustafizur Rahman, Prof Jamilur Reza Chowdhury, former caretaker government adviser M Hafizuddin Khan, Agrani Bank Ltd Chairman Bazlul Haque Khondker and Mamun Rashid, among others, attended the meeting.
On the domestic resource mobilisation, the Finance Minister observed there was not much progress in non-NBR revenue collection. We’ll have quite a quantum jump next year because we’ve already taken a number of steps to review the existing rates and charges.”
He said there might be some unpleasant decisions, but some of them would come in the next budget for fiscal year 2012-13.
Referring to the economists’ concern on reduction in national savings, Muhith said he was not disturbed with the issue as the country had ideal savings for quite some time. “This is rather moving towards a balanced situation,” he added.
Admitting that the project preparation process of the government is extremely week, the Finance Minister stressed the need for making improvement in this regard although it would be tough.
The country also lacks capacity in evaluation and forecasting the economy, he said adding that the planning process has changed. “It has turned into an indicative planning rather than investment planning.”
The economists present at the meeting suggested the government to go for more domestic resource mobilisation, emphasis on aid utilisation, depending less on bank borrowing, export diversification, giving emphasis on containing inflation, rationalising the bank interest rates.
Taking part in the discussion, economist Debapriya Bhattacharya said maintaining the balance between expectation and ability will be the main challenge for the government in the next budget. “The Finance Ministry should not give more emphasis on such political issues that could affect macroeconomic stability,” he added.
He said most of the macroeconomic indicators have deteriorated and the government should not overemphasise implementing political pledges.
Former adviser to caretaker government M Hafizuddin Khan said foreign aid utilisation must be given priority and suggested increased monitoring and evaluation of project implementation.
Former central bank governor Dr Farashuddin said borrowing from the banking system, especially from the central bank, is very dangerous for the overall economy as it is high-powered money.
He suggested taking measures for the diversification of export products. He also suggested withdrawing five percent tax on pension scheme because there is no such tax in other countries.
Renowned educationist Prof Jamilur Reza Chowdhury gave emphasis on materialising the goals of digital Bangladesh, strengthening the PPP policy, forming accreditation council for private universities, giving more effective the government e-procurement system and taking fast steps towards MRT.
CPD executive director Prof Mustafizur Rahman said with the current GDP growth of 6.7 percent and the rate of inflation hovering around 10 percent, the national budget for the next fiscal could be increased to 17 to 18 percent.
He also said expenditures on subsidies must be streamlined for reaching their benefits to the people, adjusting government subsidies in different sectors.
Prof Mustafiz also suggested preparing a coal policy as the country’s power consumption would reach 40, 000-megawatt (MW) by 2020.
Banker Mamun Rashid laid emphasis on streamlining the subsidies for Power Development Board (PDB) and Bangladesh Petroleum Corporation (BPC). He suggested formation of Coal Corporation for proper utilisation of coal for power generation.
Bangladesh Bank Governor Dr Atiur Rahman, Finance Division Secretary Dr Mohammad Tareque, NBR Chairman Dr Nasiruddin Ahmed and IMED Secretary Mozammel Haque were present.
“The next national budget will be more strategic rather than financial,” he said while addressing a pre-budget meeting with economists at the Finance Ministry’s conference room.
He said the next budget would also target to contain the inflation rate within single digit from the existing double digit of over 10 percent.
The Finance Minister said special emphasis would be given on skill development and speeding up efforts for land digitisation in the upcoming budget alongside enhancing coordination among ministers to expedite implementation process of the Annual Development Programme (ADP).
Former Bangladesh Bank Governor Dr Farashuddin, CPD distinguished fellow Dr Debapriya Bhattachariya, executive director Prof Mustafizur Rahman, Prof Jamilur Reza Chowdhury, former caretaker government adviser M Hafizuddin Khan, Agrani Bank Ltd Chairman Bazlul Haque Khondker and Mamun Rashid, among others, attended the meeting.
On the domestic resource mobilisation, the Finance Minister observed there was not much progress in non-NBR revenue collection. We’ll have quite a quantum jump next year because we’ve already taken a number of steps to review the existing rates and charges.”
He said there might be some unpleasant decisions, but some of them would come in the next budget for fiscal year 2012-13.
Referring to the economists’ concern on reduction in national savings, Muhith said he was not disturbed with the issue as the country had ideal savings for quite some time. “This is rather moving towards a balanced situation,” he added.
Admitting that the project preparation process of the government is extremely week, the Finance Minister stressed the need for making improvement in this regard although it would be tough.
The country also lacks capacity in evaluation and forecasting the economy, he said adding that the planning process has changed. “It has turned into an indicative planning rather than investment planning.”
The economists present at the meeting suggested the government to go for more domestic resource mobilisation, emphasis on aid utilisation, depending less on bank borrowing, export diversification, giving emphasis on containing inflation, rationalising the bank interest rates.
Taking part in the discussion, economist Debapriya Bhattacharya said maintaining the balance between expectation and ability will be the main challenge for the government in the next budget. “The Finance Ministry should not give more emphasis on such political issues that could affect macroeconomic stability,” he added.
He said most of the macroeconomic indicators have deteriorated and the government should not overemphasise implementing political pledges.
Former adviser to caretaker government M Hafizuddin Khan said foreign aid utilisation must be given priority and suggested increased monitoring and evaluation of project implementation.
Former central bank governor Dr Farashuddin said borrowing from the banking system, especially from the central bank, is very dangerous for the overall economy as it is high-powered money.
He suggested taking measures for the diversification of export products. He also suggested withdrawing five percent tax on pension scheme because there is no such tax in other countries.
Renowned educationist Prof Jamilur Reza Chowdhury gave emphasis on materialising the goals of digital Bangladesh, strengthening the PPP policy, forming accreditation council for private universities, giving more effective the government e-procurement system and taking fast steps towards MRT.
CPD executive director Prof Mustafizur Rahman said with the current GDP growth of 6.7 percent and the rate of inflation hovering around 10 percent, the national budget for the next fiscal could be increased to 17 to 18 percent.
He also said expenditures on subsidies must be streamlined for reaching their benefits to the people, adjusting government subsidies in different sectors.
Prof Mustafiz also suggested preparing a coal policy as the country’s power consumption would reach 40, 000-megawatt (MW) by 2020.
Banker Mamun Rashid laid emphasis on streamlining the subsidies for Power Development Board (PDB) and Bangladesh Petroleum Corporation (BPC). He suggested formation of Coal Corporation for proper utilisation of coal for power generation.
Bangladesh Bank Governor Dr Atiur Rahman, Finance Division Secretary Dr Mohammad Tareque, NBR Chairman Dr Nasiruddin Ahmed and IMED Secretary Mozammel Haque were present.
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