The Business Standard 21 July 2020
Potentials in GDP growth, investment, savings and revenue collection to be reflected in the government’s eighth Five-Year Plan are being trimmed down as the Covid-19 pandemic continues its roundups without no sign of abating.
Major changes are being carried out to all the gauges of the plan set last January to be achieved by 2025.
Against the backdrop of the pandemic, almost all the targets for the current and next fiscal year have been lowered. However, some indicators have been projected to see more growth from 2022-23 to 2024-25 fiscal year than the early estimations.
The General Economic Division of the Planning Commission has sought the written details of the indicators for the three years by July 25.
“The target of many indicators is yet to be finalised; but those might be settled by the end of this week,” General Economic Division Member Dr Shamsul Alam told The Business Standard.
However, Former World Bank Lead Economist Dr Zahid Hussain thinks that the long-term plan could wait, and the government is supposed to focus on the fight against the pandemic.
“Amid the virus pandemic, no one can predict where the international or local economy could go in the future. Specifically, no country can assume what the next two years would look like.
“Lowering or raising the targets are pointless. Because it is still uncertain whether the economic activities needed to achieve the targets would continue at local or international level,” added Dr Zahid.
He commented that fixing the targets for 2021 to 2025 periods against such uncertainty is nothing else, but some mere “economic fictions”.
Growth in the current year budget has been forecasted at 8.2 percent which was at 8.23 at the draft of the Eighth Five-Year Plan tailored before the virus outbreak. This has been lowered to 7.69 percent. Similarly, growth in the next fiscal year has been estimated at 0.18 percentage points less than estimated last January.
In the meantime, growth from 2022-23 fiscal to 2024-25 fiscal has been raised from the previous estimation. Growth in 2025 has been raised to 9.39 percent which in the earlier draft was at 8.51 percent.
Due to the virus spread, for the first-time revenue growth posted a negative growth in the last fiscal year. Despite the fact, the current year budget estimated a high-growth in revenue collection this year.
The earlier draft of the five-year plan had the GDP-revenue ratio for 2021 at 11.85 percent, now it is being trimmed to 11.19 percent. For 2025, the primary target of the ratio was at 16.35 percent, but was later reduced to 14.06 percent.
Meanwhile, the poverty reduction target in the plan remains unchanged for 2021 and 2025, though a major portion of the population slipped into poverty due to the pandemic. The Planning Commission set the poverty reduction target for 2021 and 2025 at 17.27 and 12.17 percent respectively.
The commission hopes the per capita income will be $2,250 in 2021 and $3,271 in 2025. Per capita income was at $1,909 by the end of the 2018-19 fiscal year.
