Implementation of the proposed budget for fiscal 2014-15 and attainment of the 7.3 per cent GDP (Gross Domestic Product) growth would largely depend on an environment congenial to private sector investment, speakers said at a discussion on proposed budget Sunday.
They also said along with ensuring political stability, the government should take visible steps to help restore confidence of the investors. The private investment has virtually stagnated following several big incidents like Hall-Mark Group loan scam, fraudulence of MLM companies and share market debacle.
"The proposed budget offers enough investment incentives like the previous years, but the absence of an investment climate in the country remains a big factor," Professor MA Taslim, chairman of the economics department of the Dhaka University (DU), said at the post-budget discussion on 'Budget for 2014-15: Will it boost growth and investment?'. The discussion was organised by the Economic Reporters Forum (ERF) at the National Press Club in the city.
He said the negative trend in investment started from fiscal 2010-11 when political instability was not a big problem.
"But, series of incidents happened following that year. These affected investment environment largely," he said.
Former adviser to the caretaker government Dr AB Mirza Azizul Islam said it seems that the government is more interested to increase public sector investment rather than boosting investment by the private sector.
"The government investment is not always good for a country like Bangladesh since there remains doubt about quality and transparency," he said.
Raising questions over sources of financing of the budget, Dr Islam said if sources are not genuine then the proposed budget will be difficult to implement.
"Comparing the targets of revenue earning, annual development programme (ADP) of the proposed budget with those of previous budgets, I have doubt about implementation of the former," he said.
Dr Islam said the government does not have enough capability to implement such a big budget.
He emphasised on some issues to boost the overall economy including setting up of special economic zones (SEZs) and industrial estates of the BSCIC (Bangladesh Small and Cottage Industries Corporation) in suitable areas, discussion with entrepreneurs on investment and providing market demand literacy to students.
Former Secretary Faruk Ahmed Siddique raised questions over imposition of tax on profit of investors and said though not illogical, it is too early to impose any tax before putting the market in a stable situation.
"Three per cent tax on profit of Tk 1.0 million and 5.0 per cent tax on profit of Tk 2.0 million are not so high and it is very rational. But the government can take more time before imposing such kind of tax," he said.
Director of the Bangladesh Institute of Development Studies (BIDS) Dr Zaid Bakht said after the Hall-Mark Group loan scam, the commercial banks received a few big investment proposals.
"If a proposal comes, the lingering processes dishearten the investors," he said.
Dr Bakht said an intra-bank 'no-confidence' situation has been created. This has prompted the banks for keeping a large amount of idle money.
Centre for Policy Dialogue (CPD) additional research director Khandaker Golam Moazzam said as the finance minister proposed to lift supplementary duty (SD) on some products and to decrease subsidy for the Bangladesh Petroleum Corporation (BPC), these will increase living expenditure of general people.
"Transportation cost and consumer expenditure would increase," he said.
President of the Bangladesh Women Chamber of Commerce and Industry (BWCCI) Selima Ahmed said an equal privilege should be provided for all to boost investment and economy.
"Women and youths should be included in the production cycle if we want actual economic growth of the country," she said.
Ifad Group Director Tashfeen Ahmed and ERF General Secretary Sajjadur Rahman also spoke at the post-budget discussion with ERF President Sultan Mahmud in the chair.
