The upcoming budget should concentrate more on agriculture as its stunted growth may slice off the national GDP growth, says leading economist M Asaduzzaman.
The former Research Director of the Bangladesh Institute of Development Studies (BIDS) told bdnews24.com in an interview that whenever agriculture has failed to grow, it has impacted adversely on the country’s GDP growth.
He said the annual development programme (ADP) must closely focus on development of agriculture to raise the production.
Citing information of the Bangladesh Bureau of Statistics (BBS), the economist said, “The agriculture sector this fiscal saw an additional 1.18 percent growth over the last fiscal year. Of that, crop production growth rate was only 0.15 percent, which is really frustrating.”
According to BBS, last year the agriculture growth rate was 2.46 percent, lower than the 5.13 percent in the 2010-11 fiscal year.
“This situation demands proper attention to the agriculture sector to continue the country’s GDP growth,” Asaduzzaman said.
The BBS has already projected a 6.03 percent GDP growth in its economic survey ahead of the upcoming budget, though the last budget for 2011-12 fiscal had envisaged a growth of 7.2 percent.
Asaduzzaman, an agricultural economist, said the price of rice in the market was still ‘tolerable’ as the country was not having to import it now. “The foreign currency reserve is stable too.”
“But the necessity to import rice will rise again if the rate of overall production keeps falling like this year. This will increase inflation rate and create pressures in the economy that will pull down the growth rate.”
This is why Asaduzzaman urged the government to focus on boosting agricultural production and expand its marketing, specially focus on research and development.
This sector is still the one providing huge employment and that is not going to change soon, he said adding, “That’s why this sector must be developed.”
According to the BBS, there are 19 million acres of agricultural land in the country and nearly 30 million people directly working in this sector, which is more than 60 percent of the total population.
“The size of ADP has increased in the upcoming budget. But it is not clear how much of it will be implemented. Because the ADP was not implemented completely in the previous budgets,”Asaduzzaman said.
Meanwhile, he said most of Tk 68.52 billion allotted for the Padma bridge project in the budget will be spent in the preliminary work of the bridge.
And he thinks there will some ‘political financing’ in an election year as well.
“This situation will become a challenge for the government to meet the growing demand for spending on education, health and infrastructure. So the government must have a special plan in the budget which will make things easier for the next government to implement the key projects.”
In the 2012-13 fiscal year, Tk 550 billion was allotted for ADP but was later revised downward to Tk 523.66 billion in the budget.
Latest information shows that the rate of ADP implementation stands at 49 percent in the first nine months of the current fiscal (July-March) as against 45 percent at the same time in the last fiscal. But in 2011-12 fiscal, the rate of ADP implementation stood at an awesome 94 percent.
Asaduzzaman lamented the ‘terrible condition of the revenue collection’, saying the Finance Minister will have nothing to do if the government fails to manage necessary funding for the development projects.
The government had set its revenue collection target at Tk 1.12 trillion for the financial year 2012-13, but shortfall in revenue collection by the National Board of Revenue (NBR) has increased to Tk 48 billion in the first 10 months (July-April).
Media reports suggest the NBR has managed to collect Tk 830 billion until April this year against the annual target of Tk 873.8 billion.
The former BIDS Research Director said special initiatives must be considered in this budget for the development of the energy sector for industrialisation.
“The power sector has become somewhat stable now, atleast in the short-term. Long-term investment must begin.”
The economist also favoured increasing the tax-free income limit of individuals considering the inflation, but was all for ways and means to ensure greater compliance .
Source: bdnews24
