The most alarming trend in the country's fiscal management is that budget deficit is increasing and a sizeable portion of revenue budget is spent for debt servicing.

Stating this. Dr Debapriya Bhattacharya, Executive Director of the Centre for Policy Dialogue, noted that budget deficit in this fiscal year (1999-2000) would be around stx to six and a half per cent. This is even higher than that in the 'flood year', 1998-99. the most difficult year in the country's history. he added.

The budget deficit in 1998-99 was around five per cent.

Debapriya Bhattacharya was speaking at a pre-budget discussion organised by the Institute of Cost and Management Accountants of Bangladesh (1CMAB) at its auditorium in the city yesterday.

Debapriya also said around one fifth of the revenue budget is spent for debt servicing and it would continue for another two to three vears. adding that 17 to 18 per cent accounts for domestic debt servicing and about five per cent for foreign debt.

Against this backdrop. Bhattacharya said, in the coming fiscal year the major task of the government would be to balance the budget and If it fails to make up the deficit, it would have to borrow from the banking system.

There is nothing wrong in borrowing on the part of the government if it has the ability to repay but there should be tiansparency. "Deficit financing as a part of fiscal programme has to be shown and it is better to show it while placing the budget." he said.

Debapriya mentioned that some think it would be politically suicidal' for the gov-emment to show, while placing the budget, how they are going to finance the deficit.

But. he said, it would be wiser to show the plan of deficit financing in the budget and face criticism of the opposition and others for once. Otherwise, the government would be blamed throughout the year for this.

The rational step would be to cut tax to encourage private investment and widen the tax net. he felt.

Debapriya also said growth of revenue earning in this fiscal in real terms was ‘actually negative.*

Others who spoke on the occasion included Syed Masud Reza, member of the parliamentary standing committee of Finance Ministry, opposition lawmaker Akhtar Hamid Siddiqui. President of 1CMAB Abul Kalam Mazumdar. Muzaffar Ahmed of 1CMAB was in the chair.