Muhith unveils Tk250,506 crore budget with the target to achieve 7.3% economic growth
A new national budget of Tk250,506 crore for the fiscal year 2014-15 starting in July was placed in the parliament yesterday, aiming to accelerate the country’s economic growth at a pace it would gradually reach 10% in 2021.
Finance Minister AMA Muhith in his budget speech said this budget is a continuation of the government’s plan taken earlier in the previous 5-year term with the vision to transform Bangladesh into a middle income country.
“All the development initiatives in our previous term will continue during the present tenure as well,” he asserted unequivocally, starting the speech at 3:40 pm with Speaker Dr Shirin Sharmin Chaudhury in the chair.
“Our main aim will be to continue the ongoing programmes and launch new ones to implement the vision,” said the minister.
He dwelt on political unrest and disruptions in the democracy that hindered not much the expected growth in the past several years with particular reference from July last year to January this year, but expressed the hope that the progress would continue to take place in future despite all odds.
The spirit prompted the optimistic minister to give his speech titled “Progress Uninterrupted: A Promising Future Beckons Bangladesh.”
The proposed spending, being considered as ambitious, is due to increased allocation for priority sectors the government had identified earlier to facilitate investment in the country, which faced a serious setback in the last few years.
The much-talked-about Padma Bridge is among few of the projects the government had intended to develop in the transportation sector – one of the main priority sectors what the government thinks hindering investment.
The finance minister said he had to increase the budget size to support the projects taken to achieve gradually the vision 2021, but barely explained how resources would come. About local resource mobilisation, the budget documents suggest his dependence on automation of the tax system now under implementation and amendment to some tax laws.
However, the proposal made not to increase the tax-free exemption limit is being considered as a strategy to net more taxpayers while increasing the income tax rate on high income group is to earn more from them. The budget also offered some tax incentives to promote investment and some exemptions for industrial raw materials, limiting scope for tax collection.
The minister depended much on the bank borrowing, which runs counter to the aim of increasing private sector investment as economists and bankers consider it to crowd out the private sector borrowing from the banking system and raise interest rate on bank loans. The estimate for external resources hardly increased.
Industrialists and trade leaders accordingly raised concern as to whether the budget could deliver as per its goal the finance minister tried to fix for the industrialisation – one of the government’s strategies to achieve the vision 2021.
They said the measures are more or less targeted boosting investment, but the challenge is to implement them properly.
The first budget of the present term has also an outline for the next five years of the development activities.
Economists said the budget has lots of commitments in accordance with the 10-year perspective plan, but lacks specific programmes to implement the commitment. For example, there is no time-bound announcement when the PPP policy would be in place so the businessmen could prepare for investment.
Moreover, they said, whatever measures were proposed, there is lack of investment-friendly environment in the country as the businessmen apprehend political unrest.
Muhith, however, said the consecutive second term would enable the government to take forward the development initiatives taken during the last term to a higher trajectory. He expressed deep regret that a big political party by boycotting the election tried to disrupt the democratic process.
“We laid emphasis on building of infrastructure, development of power and energy sectors, improvement of information technology and creation of an investment-friendly environment,” he said.
The reform initiatives beginning from 2009 made the economy so resilient that even the violence unleashed by the opposition parties before the 10th parliamentary elections could not destabilise it.
“We have successfully mitigated the pre-election damages and the economy now is back to its robust best,” the minister told the House.
Hopefully, he said, the budget framework proposed in view of the domestic and global perspectives will support growth as well as contain inflation. “People will find their aspirations reflected in it.”
Source: Dhaka Tribune
