FROM PAGE B1

Banks, facing a captive and low-risk sovereign borrower, have less appetite and less capacity to lend to businesses.

The result is a crowding-out effect that is not theoretical; it is already showing up in the data.

Above all, persistently high inflation and a rapidly rising debt-servicing burden are squeezing the country’s fiscal space, leaving the government with less room to support growth, investment and jobs.

Business leaders and economists are clear-eyed about the risk.

Unless the government demonstrates genuine fiscal discipline, meaningfully expands the tax base, and takes visible steps to restore confidence in the investment climate, the budget’s revenue and growth targets will likely join a long line of lofty projections that quietly missed their marks.

That pattern of targets set, revised, and forgotten is precisely what erodes the business confidence the government now needs to rebuild.

Business Initiative Leading Development (BUILD) Chairperson Abul Kasem Khan has called for a shift away from “stereotypical” budget-making, urging realism, deregulation and broader reforms.

“We do not want a continuation of the stereotypical approach in the budget; rather we want novelty, modernisation, and genuine deregulation,” he said.

He questioned the feasibility of ambitious revenue targets in a slowing economy.

“If GDP growth has fallen from around 7 percent to nearly 3.5 percent, then expecting disproportionately high revenue collection raises serious questions,” he noted, adding that pressure on a narrow tax base could undermine compliance.

On the business environment, Khan stressed reducing the cost of doing business.

“As businessmen, what we want most is a reduction in the cost of doing business. That includes reforming advance income tax, addressing refund delays, and removing the back-and-forth policy approach that has long created uncertainty,” he said.

He also called for faster circulation of money and stronger consumption. “If we want the economy to function properly, we must allow money to circulate and consumption to grow. People’s purchasing power must increase so that they feel confident to spend, which in turn drives production and investment,” he added.

Khan further emphasised broad-based deregulation.

“Deregulation must be broad-based and meaningful. A small entrepreneur should be able to start a business within a day or two, without navigating months of licensing procedures,” he said, adding that implementation has lagged behind repeated reform promises.

Fazlul Hoque, former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said, “The government is still new, and we do not yet have a clear understanding of its performance capacity.”

“Perhaps it would have been better if the budget had been presented a little later, after fully assessing the economic realities.”

Hoque noted an “unwritten trend” of expanding budgets each year, driven partly by political considerations, and warned that weak revenues amid slowing activity could make targets difficult.

“When economic activities slow down, revenue earnings naturally decline. Imports fall, exports face difficulties and domestic consumption weakens,” he said, adding that large revenue gaps may force higher government borrowing and squeeze private credit.

“A large portion of government expenditure is now going toward interest payments on debt,” he said, stressing stronger fiscal discipline and reduced corruption.

“If corruption can be reduced, government income will rise while expenditure will fall at the same time,” he added.

The former BKMEA president also warned of inflationary pressure after the new pay scale for public employees and said weak fiscal management could hurt private sector credit and jobs.

“The government wants to create 1 crore jobs, but if the private sector suffers because of tighter credit conditions and higher interest rates, achieving that target will become difficult,” he said.

Kamran T Rahman, president of the Metropolitan Chamber of Commerce and Industry (MCCI), said relying on ambitious revenue targets without expanding the tax base is unsustainable.

“Putting additional pressure on existing taxpayers will only make the situation more difficult,” he said, noting that despite 1.28 crore TIN (taxpayer identification numbers) holders, only 40-45 lakh file returns, many of them zero returns.