CPD suggests high-powered body for implementing ADP

FE Team | Published: June 15, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The government has extended the deadline to receive feedback from the general public and other stakeholders on the proposed budget for the fiscal 2007-08 by three more days. The deadline, announced earlier, was to expire Thursday.
Finance and planning adviser AB Mirza Azizul Islam disclosed it on the day while addressing a Centre for Policy Dialogue (CPD) seminar titled 'state of the Bangladesh economy and budget responses 2008' in a city hotel.
The government will accept feedback from the people and organisations on how to develop the projects and ensure quality of the implementation processes. The ministry concerned and the Implementation Monitoring and Evaluation Division (IMED) of the planning ministry will receive the suggestions, recommendations and propositions online.
Responding to the suggestions placed by business leaders and other stakeholders in the gathering, the Finance Adviser assured that a meeting will be held shortly with the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) to discuss about the apprehensions that duty increase on raw materials from 5.0 per cent to 10 per cent will adversely affect the local industries.
Moderated by former finance minister M Syeduzzaman, the dialogue was addressed by Bangladesh Bank Governor Salehuddin Ahmed, executive director of CPD Debapriya Bhattacharya, president of Metropolitan Chamber of Commerce and Industry (MCCI) Latifur Rahman, president of FBCCI Mir Nasir Hossain, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Anwar-ul Alam Chowdhury, Bangladesh mission head of International Monetary Fund, Jonathan Dunn and former MCCI president Laila Kabir.
Former ministers and law makers MK Anwar and Osman Faruk, Rashed Khan Menon, Abdur Razzak and GM Quader, former deputy governor of Bangladesh Bank Shah Abdul Hannan, former ERD secretary Moshiur Rahman, former commerce secretary Sohel Ahmed Chowdhury and FBCCI director A Rouf Chowdhury, among others, also spoke.
Commenting on the views expressed by business leaders and experts on the imposition of 10 per cent import duty on industrial raw materials and textile machinery, the Finance Adviser said there should be a comprehensive criticism on the budgetary proposals instead of piecemeal.
"You should not forget that the proposed budget has waived the infrastructure development surcharge (IDSC), so you should also consider the possible value addition to be added due to the proposed measures," Mirza Aziz said.
Mirza Aziz termed the budget proposed for the coming fiscal year unconventional and realistic and said it's not that ambitious.
He said it is unique in the sense that for the first time it included contingent liabilities, proposed to curtail discretionary powers of the tax officials and sought feedback from individuals and organisations regarding project implementation.
Regarding the projected GDP growth rate for the fiscal 2007-08 (7.0 per cent) and inflation (6.5 per cent), the adviser said," We are convinced that both are possible as both domestic and foreign financing will be available within the stipulated time-frame".
He said the government received foreign aid worth $ 2.0 billion until Wednesday which was only $ 400 million before assumption of office by the present government on January 11,2007.
On price situation, the adviser said the age-old marketing system should be changed.
"There is something wrong in the existing marketing network and we are also working for enhancing production of various items to rein in the escalating price situation," he added.
Regarding the proper implementation of the proposed budget, he said the government intends to start the process within the very beginning of the new fiscal year.
If the government can retrieve the ill-gotten money believed to be stashed away at home and abroad, a portion might be used to reduce deficit financing or enlarge the Annual Development Programme (ADP), he added.
He also said the recovered ill-gained money will be deposited in the government's consolidated fund.
Explaining "three reasons that have made the budget unique", he said efforts have been put to make the budget transparent and accountable. "For the first time, contingent liabilities have been set in the budget," he added.
He also said usually the budget is prepared taking into account the expenditure, not the funds that can be mobilised. But this year, the focus was on the availability of local and foreign funds based on which the expenditure was estimated.
The target of revenue collection has been increased by only 0.2 percentage point of the GDP (Gross Domestic Product) and in no way can it be termed ambitious, he maintained.
The bank borrowing to meet the deficit is 1.6 percent of the GDP, which too is not that high, he noted.
On the ailing jute sector, the finance adviser said it will not be viable to retain the sector in public sector.
"We must seriously think that the government cannot continue to incur losses in the jute sector, I just disbursed Tk 330 million as arrear wages of jute mills workers," the adviser regretted.
The BB governor in his speech said the stock market and bond market will be strengthened to reduce dependency on bank borrowing.
"The new budget has rightly emphasised the development of bond market and stock market," the BB governor said.
Former minister MK Anwar said a tight monitoring policy is needed to implement the budget.
"Domestic industry must be protected from any adverse taxation," he added.
Former minister Osman Faruk hailed the budget and vowed to work unitedly to implement the process.
"There is no rhetoric as the budget reactions this year is obviously good," he said.
The MCCI president Latifur Rahman said interest of local industry should get priority since VAT accounts for a major portion of domestic resources.
Former MCCI president Laila Kabir said supply of fertiliser should be ensured to facilitate agriculture growth.
Former commerce secretary Sohel Ahmed said big wholesale and retail outlets like Kawran Bazar should be established around the capital to ensure supply of essentials.
CPD Executive Director Debapriya Bhattacharya said "the finance adviser wanted to break away from the past but failed to make a breakthrough in the budget."
Rapid poverty alleviation should be targeted and private sector investment should be pro-poor, otherwise, Tk 800.00 billion expenditure target in the budget cannot be achieved, he explained.
The CPD suggested formation of a high-powered committee for implementing the annual development programme (ADP), a taskforce for quick release of foreign aid and forging private-public and government-NGO partnership for implementing the budget.
Debapriya praised the finance adviser for trying to streamline the economy and taking some positive measures regarding income and expenditure of the government.
He appreciated that the budget proposals reflected a number of recommendations made by the CPD for bringing reforms and expediting development efforts.