Finance Minister AMA Muhith on Thursday said the government will focus on bringing a momentum in overall investment in the coming fiscal year as he thinks the ‘sluggish investment’ trend was the ‘weakest side’ of the government in the last five years.
“Investment was very limited (in last 5 years). We want to take a big initiative in this area. It’s a very difficult target, but we must do it at any cost,” he told reporters at the Secretariat after the first pre-budget discussion with leading economists.
The Finance Minister said the private sector investment did not increase in the last five years, which is the lifeline of the economy. “We need to look into it why the domestic investment remained so low.”
The investment-to-GDP ratio stagnated at 24-25 percent for nearly a decade and the government wants to raise the investment-to-GDP ratio to 32 percent for having a higher economic growth.
Asked about the key focus areas for the next budget, Muhith said, “We’ll focus on how to increase the total investment, how to obtain more foreign direct investment (FDI) and most importantly how to improve the quality of the administration.”
He also said the priority, as per the government manifesto, still remains the highest on power and energy, agriculture and human resource development.
Budget Size, GDP
Asked about the size of the next budget (fiscal year 2014-2015), Muhith said, “Nothing is finalised yet. We’ve to calculate more. By next month it could be known.”
Earlier at a programme in Sylhet, he said the size of the national budget for the upcoming fiscal year might be around Tk 2.5 trillion.
When his attention was drawn to this, he said, “It’s not definite. We’re yet to reach that stage to tell you the exact size of the next budget.”
Responding to a question on GDP (gross domestic product) target, Muhith said they are yet to reach any decision yet. “It (GDP target) is reduced to 6.5 percent for the current fiscal year (against 7.2 percent). We’re not in a position right now to tell you about next year’s target. Hopefully, it’ll be known in the next month.”
On revenue generation, the Finance Minister sounds optimistic over increased earnings from revenue in the coming fiscal year.
The Finance Minister said the next budget would be part of its five years’ target but how long the present government remains in power is different thing.
Muhith hoped that the Financial Reporting Act will get through Parliament in the next session.
Budget Deficit
The Finance Minister said many are advising that the budget deficit could be kept at more than 5 percent of the GDP for the coming fiscal year. “I’m totally against it. I’ve no intension of increasing the deficit beyond 5 percent.”
They, however, were unanimous that the budget deficit should not be under any circumstances over 5.0 per cent of the gross domestic product (GDP).
District Budget
The Finance Minister said the government would come up with district budget on a very limited scale in an effort to decentralise power and strengthen local government.
“Seven districts will be covered under the district budget plan. The purpose of the district budget is to help them (district-level administration) prepare proposals for their own budget.”
Advisory Bodies
Muhith said since the Finance Ministry does not have any advisory body involving private sector, he wants to have such a committee. “So, I’ll try to set up two bodies…one for Finance Division.”
Proposals
Highlighting the proposals that he got from the economists, Muhith said they talked about proper planning on land use. “Since we’ve land scarcity, we need to have a proper planning on land use.”
The economists also suggested the Finance Minister to give more focus on railway sector and expediting the Public-Private Partnership (PPP) initiative.
Muhith also said there were proposals on strengthening banks’ internal control and banks’ management system since ‘it was not as good as expected’.
They also proposed to monitor the GDP growth projection after every three months instead of once in a year. The Bangladesh Bureau of Statistics (BBS) now comes up with GDP figure at the end of fiscal year.
Economists from the think-tanks including Bangladesh Institute of Development Studies (BIDS) and Policy Research Institute (PRI) were present.
Source: UNBConnect