& çâÌæÚUæð´ ·¤è ¥ôÚU Îð¹Ùæ ÁæÚUè ÚU¹ð´ ¥ÍæüÌ ¥ÂÙð ÜÿØ ÂÚU ŠØæÙ ÚU¹ð´Ð ãæÚU Ù ×æÙð´, €UØô´ç·¤ ·¤æ× ·¤ÚUÙð âð ¥æÂ·¤ô ©gðàØ ·¤è Âýæç# ãôÌè ãñ ¥õÚU ÁèßÙ ·¤æ ¹æÜèÂÙ ÎêÚU ãôÌæ ãñÐ ÖÜð ãè ÁèßÙ ×ð´ ç·¤ÌÙè Öè ·¤çÆÙæ§ü €UØô´ Ù ¥æ°, çÁ™ææâæ ¥õÚU ©ˆâæã ÕÙæ° ÚU¹ð´Ð ŠØæÙ ÚU¹ð´, ÜÿØ ã×ðàææ ¥æÂ·Ô¤ Âæâ ãôÌð ãñ´ çÁ‹ãð´ ÂæÙð ·Ô¤ çÜ° ÂýØæâ ¥æÂ ·¤Öè Öè àæéM¤ ·¤ÚU â·¤Ìð ãñ´Ð

Borrowing bothers economists

Staff Correspondent
Economists expressed a mixed reaction to the proposed budget for fiscal year 2008-09. They said borrowing from the banking sector to cover budget deficit is a major risk for the government.
They also said slashing the inflation rate down to nine percent from the existing double digits is also a major challenge for. the government.
SEE PAGE 15 COL 1 FROM PAGE 1
They welcomed the government tor giving priority to agriculture for food security, increasing allocation for social safety-net programmes, continuing to subsidise fuel, fertiliser and food, and reducing import duty on raw materials and intenne-diary goods.
Terming the proposed budget the 'hugest one" in the country's history, they said it predicts that the government is going for short-term measures in the next fiscal year.
M SYEDUZZAMAN
Terming the proposed budget "ambitious", former finance minister M Sveduzzaman said it is the largest budget in the history of Bangladesh.
The budget also shows a new trend with the revenue size three times larger than the development budget, which is unusual, he said.
The annual development programme’s (ADP) size also came down, he added.
He said, however, that considering the present situation the government's priorities in the proposed budget are basically short-term. 'Priority on food security and agriculture with short-term measures is in the right direction," Syed uzzaman said
He said the time has come to take long-term and mid-term measures in agriculture sector to ensure food security.
♦ Commenting on the continua-i non of fertiliser and diesel subsidies, he said. The success of the subsidies depends on several things and we have to see the mechanism of distribution of the subsidy for farmers’benefit*
He said the finance adviser also gave priority to the power sector. "Let us see in the next six months how the government initiatives are going to be implemented to increase power generation," he added.
The former finance minister welcomed the government for concentrating on education and health, reduction in import duty, incentive for housing, and SME and ICT sectors.
"The incentives should help the private sector's growth," he added.
Talking about macro-economic aspects, he said the total deficit ofTk 30,000 crore is less than the ADP size and the government will have to
borrow huge amount to meet the deficit.
He said 57 percent of the total ADP will be funded by project aid disbursement The success of (he ADP will depend on faster disbursement of fund, he said
Slashing the inflation rate to nine percent from existing double-digit rate will depend on several things, he said adding that wage increase, subsidy for fuel and food may raise the inflation rate.
MUSTAFIZUR RAHMAN
Centre for Policy Dialogue (CPD) Executive Director Mustaflzur Rahman found some positive initiatives in the proposed budget including poverty alleviation, reduction of social inequality, and income generating programmes.
According to him, the 6.5 percent GDP projection is "modest". He, however, said the budget needs coordination with the Poverty Reduction Strategy Paper (PRSP). PRSP projected 6.7 percent GDP growth in the upcomingyear.
He expressed concern over the government’s possible huge bank borrowing saying it could hamper private sector investments.
ZAID BAKHT
Economist Zaid Bakht said borrowing from the banking sector to cover the budget deficit will be a major risk for the government.
"As per my calculation, the government will have to borrow between Tk 30,000 crore and Tk 35,000 crore from the banking sector to meet the budget deficit. If the government borrows from staterun banks, then inflation may be hiked. On die other hand, if the government borrows from private commercial banks, then there will be a chance for increase in interest rate," he said.
Borrowing from the banks will also have a negative impact on macro-economy, said Zaid Bakht, also research director of Bangladesh Institute of Development Studies.
Doubting the achievability of finance adviser's high revenue target, he said the revenue targel should be downsized.
He. however, said increased allocation for social safety-net programmes, proposed duty cut on raw materials and intermediary goods, continuation of subsidising food, fuel and fertiliser are the right choices in the proposed budget
QUAZI KHOLIQUZZAMAN
Quazi kholiquzzaman, president of Bangladesh Economic Association (BEA), supported the proposed priority allocation to agriculture, education and agio-research.
However, he has doubt about the execution of proposed development budget. He said the budget 2008-09 will be executed by both present government and an elected government, scheduled to take charge through elections in December.
"But the present uncertainly in the political arena may affect budgetexecution," he said.
He said how the government adjusts the Tk 30,500-crore deficit would be a big issue in implementing the budget
In this case, if the government intends to go for high bank borrowing, it may affect private sector investments.
He expressed his doubt about getting money from donors to minimize the deficit.
ASADUZZAMAN
Asaduzzaman, research director of Bangladesh Institute of Development Studies, termed the budget "one quite friendly to agriculture".
"It is quite friendly to agriculture. But how far the subsidies proposed here go with the provisions of WTO rules needs to be closely examined." he said.
He said there are some good ideas like income-tax exemption for people having only agricultural income. It would encourage people to concentrate on farming, he added.
He said the adviser raised the issue of increasing the prices of petroleum and fertiliser but did not mention anything whether the prices of these essential items for agricul t ure wo uld be raised.
"I think the government has increased the allocation for cash subsidy in diesel keeping in mind the prices of fuels to be increased," he said. "In such case, the number of beneficiaries eligible for cash subsidymay not increase."
"But on the whole, it is (proposed budget) fine under such critical economic situation," he said, underscoring the successful implementation of the offers