Government policymakers are pursuing a "new model" centred on inclusive investment, says Prime Minister's Adviser on Finance and Planning Dr Rashed Al Mahmud Titumir amid critical views on the new budget.
He hopes this government strategy, backed by stipulated recovery measures, will help in overcoming the current economic challenges facing the country.
"Investment first, investment for all, and an economy for all - this is the model we must move towards," he told a post-budget review meet held Wednesday in Dhaka.
He also highlights a three-pronged revenue-management strategy based on "recovery, restoration and restructuring", saying that the approach would help revitalise the economy and strengthen public finances.
The Prime Minister's Adviser welcomes criticism of the proposed budget and the government activities, arguing that constructive scrutiny would help ensure the transparency that had been missing over the past more than 17 years.
"We do not want to hear words of praise as happened in the past. They listened only to praises, drove the country into crisis and then fled," he told his audience.
Dr Titumir made the remarks at the budget discussion jointly organised by the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI), local think-tank Policy Research Institute of Bangladesh (PRI) and Standard Chartered Bank at Gulshan in the capital.
The event was chaired by MCCI President Kamran T Rahman and attended by Standard Chartered Bangladesh CEO Naser Ejaz Bijoy, PRI Chairman Dr. Zaidi Sattar, PRI Research Director Dr. Bazlul H. Khandaker, PRI Director Ahmed Ahsan and MCCI Director Hasan Mahmud, among others.
The adviser makes it clear that investors are primarily looking for policy continuity and predictability.
"This has been reflected in the budget. For the first time, a five-year tax structure has been outlined. Such an initiative has never been undertaken before," he says.
He adds that the budget also contains a roadmap for deregulation and measures to ease regulatory burdens on businesses.
On financing, he says the central bank has already announced a Tk 600-billion stimulus package to support investment and economic activity.
Dr Titumir notes with optimism that the combined measures would help accelerate private investment and economic recovery.
He places particular emphasis on building an effective revenue administration and governance framework, arguing that raising tax rates alone would not be sufficient without addressing institutional weaknesses.
"It is not enough to increase tax rates or expand the tax base. Good governance and the elimination of systemic inefficiencies are equally important."
He hints that monthly action plans and performance milestones have been set for three revenue-related taskforces with progress reviewed on a regular basis.
He also says initiatives have been taken to improve transparency in revenue administration by addressing inconsistencies in the presentation of tax-collection data.
To strengthen transparency and accountability, the government is introducing dashboard-based monitoring systems for development projects and moving towards an open-data policy to support evidence-based policymaking and research.
Despite the introduction of the government's integrated budget and accounting system (iBAS++), challenges such as tax exemptions, tax evasion and tax fraud continue to persist, largely due to what he describes as a legacy of poor administrative practices.
To address these issues, specialised taskforces are being established in income tax, customs and VAT administrations, with monthly monitoring mechanisms already in place.
Business leaders, however, aired concerns over implementation challenges associated with the budget.
President of MCCI Kamran T Rahman notes that the National Board of Revenue (NBR) achieved only 65 per cent of its revised revenue target through April of FY2025-26.
Given the ambitious revenue goals ahead, he warns that taxpayers could face "increased pressure and potential harassment at the field level".
Standard Chartered Bangladesh CEO Naser Ejaz Bijoy suggests inflation-backed bond might be considered following higher inflation in the country with a gap of 3.0 to 4.0 per cent with inflation rate.
He says higher bank borrowing might create crowding-out effect in the economy.
"The biggest challenge is implementation," he says.
He has identified inflation as a major concern, arguing that the budget could have provided clearer guidance on how price pressures would be brought under control.
He also calls for more specific measures to combat corruption and a more detailed roadmap for banking-sector reforms.
PRI Chairman Dr Zaidi Sattar told the meet that the economy had experienced a form of "growth trauma" over the past five years.
While the interim government had managed to restore a degree of macroeconomic stability, he argues, the banking sector remained the economy's most significant vulnerability.
Dr Sattar feels that the budget should have outlined more urgent measures to address weaknesses in the financial sector.
"If the banking-sector crisis is not resolved, it could become most fragile part of Bangladesh's economy.
The country will not be able to emerge fully from its current economic difficulties without fixing the banking system," he asserts.
He has stressed that restoring the health of the banking sector should be treated as the country's foremost economic priority.
jasimharoon@yahoo.com
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