The upcoming fiscal year’s budget is likely to be 13-14 percent higher than the current fiscal year’s, Finance Minister AMA Muhith said yesterday.
He, however, declined to disclose the exact size of the budget for fiscal 2013-14. For fiscal 2012-13, the government rolled out a Tk 191,738 crore budget.
Although, historically, the growth rate has dropped in the election years, Muhith tipped the GDP to grow by around 7 percent in the next fiscal year.
“Admittedly, the figure sounds highly ambitious for an election year, but this year it will be different. It will be achieved despite the oppositions and difficulties.”
Muhith’s comments came at a dialogue, “Budget 2013-14: Our Expectations”, organised by the Metropolitan Chamber of Commerce and Industry (MCCI) and Maasranga Television, at the capital’s Sonargaon Hotel.
The finance minister said the pressure on the economy from power plant rentals would go down soon as some plants are due for retirement this year.
“By 2016, rental power plants would account for 11-12 percent of total power production. As a result, the power tariff will go down.”
About agriculture subsidies, the finance minister said it would be Tk 9,000 crore in the upcoming fiscal year.
Amir Khasru Mahmud Chowdhury, former commerce minister, however, doubts whether the level of GDP growth stated by Muhith is achievable.
“The investment-GDP rate has also gone down since 2009. So, if we cannot raise it we will not be able to achieve the economic growth.”
Rokia Afzal Rahman, president of MCCI, said she hopes the government would not impose any new tax in the upcoming fiscal year.
“The achievement of higher economic growth depends on sound macroeconomic policy and avoidance of confrontational politics.”
She said the government plans to start allocating funds for the stalled Padma bridge project from the next budget.
“But the government cannot cut the allocation for agriculture, social safety net and poverty alleviation.”
The MCCI president opposed the possibility of amnesty for black money and urged the government not to provide any such opportunity.
Ahsan H Mansur, executive director of Policy Research Institute of Bangladesh, said the investment growth has remained stuck at 24 percent of GDP for some years now.
“But if the country cannot raise it to 30 percent then it will not be able to achieve its desired GDP growth.”
He said the government would have to rethink on the coal policy and opt for long-term power projects.
“Otherwise, the country will not be able to overcome the pressure from high subsidy.”
Mahabub Hossain, executive director of BRAC, the world’s biggest non-governmental organisation, urged the government to increase subsidies for small farmers.
M Tamim, an energy adviser, said the government opted for rental power plants as a short-term solution to the power crisis.
“But, no medium to long-term projects have been completed.”
Moazzem Hossain, editor of The Financial Express, said the country did not see any improvement in good governance in the outgoing fiscal year.
“Although the cost of business and living costs have gone up due to the higher electricity tariffs imposed by the rental of power plants, everybody should look at the big picture, what the electricity has brought in terms of economic growth,” said Kazi Akram Uddin Ahmed, president of the Federation of Bangladesh Chambers of Commerce and Industry.
Sabur Khan, president of Dhaka Chamber of Commerce and Industry, said the high cost of electricity has discouraged new entrepreneurs from setting up businesses.
Nihad Kabir, former vice president of MCCI, moderated the programme.
Source: The Daily Star