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Macroeconomic stability should be main focus: experts
STAR BUSINESS REPORT
The focus of the national budget for fiscal year 2022-23 should be to ensure macroeconomic stability, reduce inflation and increase employment in the country, according to various experts.
“The budget will be placed at a time when the country is trying to return to normalcy from the Covid-19 pandemic,” said Debapriya Bhattacharya, a distinguished fellow of the Centre for Policy Dialogue.
“…and besides, the macroeconomic situation is in the most challenging position we have seen in at least 15 years,” he said.
“An economy can be ruined in just three months for failing to ensure macroeconomic stability and so, it should be a priority in the upcoming budget,” he said.
Bhattacharya was addressing a programme organised by NTV and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) on Saturday.
He went on to say that three other focal points for the next annual financial plan should be to create jobs, increase investment and improve the social safety net programmes.
Regarding the budget size, he said it was like an illusion as the proposed budget was cut significantly after revision while the actual amount implemented was far lower.
Bhattacharya also touched on how Bangladesh’s per capita income is rising but only 23 lakh individuals submit tax returns, which was disappointing considering the size of the population.
“So, the government and business leaders should work on addressing this issue,” he added.
Planning Minister MA Mannan said the government would aim to reduce poverty, strengthen the healthcare system and facilitate outsourcing activities in the 2022-23 national budget. “We have to improve our healthcare sector as its urgency was realised during the pandemic.”
FBCCI President Md Jashim Uddin said Russia’s war on Ukraine has become the next big challenge after Covid-19 and considering the global implications of both these crises, setting priorities for the budget was a challenging task.
Bangladesh witnessed growth in its gross domestic product for the past few years as the government had increased spending on developing infrastructure, he said.
Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said all restrictions on importing capital goods should be removed in order to raise investment and generate employment.
Abdul Moyeen Khan, member of the BNP National Standing Committee and a former minister, said the budget should be launched for the welfare of the mass people, especially the poor.
“Although Bangladesh’s infrastructure has developed over the years, it has come at a high cost as the extra money was laundered,” he added.
Agriculture Minister Muhammad Abdur Razzaque said the perspective of this year’s budget would be quite different from previous ones considering the coronavirus fallout and Russia’s invasion of Ukraine.
The conflict in Europe is a big concern for Bangladesh as the two warring nations collectively provide supplies to around 40 per cent of the global food market.
As such, the domestic inflation rate rose due to increased import costs.
“So, we have to be cautious that we don’t pay needlessly on luxury goods and the government has already taken steps in this regard,” he said.
Mahbubul Alam, president of the Chittagong Chamber of Commerce and Industry, also recommended discouraging the import of luxury items. “Instead, the budget should focus on improving healthcare and expanding the tax net.”
Syed Mahbubur Rahman, managing director of Mutual Trust Bank, said the corporate tax rate imposed on the local banking sector was high compared to that of neighbouring countries.
“There is even an excise duty on loans, which is not expected,” he added.