The proposed budget for the fiscal year (FY) 2014-15 will not attract the desired level of private investments as it did not address the major specific bottlenecks like land issue, policy prioritisation and raising the capacity of policy implementation.
The reactions came from the country's leading economists after the budget speech of Finance Minister AMA Muhith in the parliament Thursday.
They said the minister in his budget speech refrained from taking initiatives to resolve the political uncertainty that is looming despite the January 05 general election.
The economists said the projected economic growth might not be achieved in the next fiscal as the expected level of investments would not take place following the lack of adequate measures to that end.
They expressed their doubt about achieving the higher revenue growth in the next fiscal year and feared that it might lead to widening of the budget deficit more than 5.0 per cent.
They said the people of middle income bracket would be discomforted in the next fiscal as they might count extra costs for transportation, housing and purchasing other necessities they require.
Dr. Hossain Zillur Rahman, a renowned economist and former adviser to caretaker government, said the investments needed three important things: tax incentives, political stability and capacity of implementing policies.
"In my view, the budget has proposed some tax incentives, it will not help raise the private investment to the expected level," Dr. Rahman said.
"I think some big companies will derive benefit from the incentives instead of raising investments," Dr. Rahman said.
Dr. Rahman, also chairman of PPRC (Power & Participation Research Centre), said political uncertainty was looming in the country. In such a situation investors would not invest in new projects or expand the existing ones, he added.
Dr. Rahman noted that the proposed budget did not say anything about how to raise capacity of implementing policies.
Dr. Zaid Bakht, director (research) at the Bangladesh Institute of Development Studies (BIDS), said measures taken in relation to boosting the private investment were not sufficient to enhance private investments.
"I don't see there will be any significant growth in the rate of private sector investment in the next fiscal," Dr. Bakht said.
He said the proposed budget waived many taxes and extended the existing tax facility.
He said these measures might weaken the tax bases leading to reduction in tax collection.
"In my view, the revenue might not grow to the targeted level and it might widen the budget deficit," Dr. Bakht noted.
He said the government expanded its expenditure without raising its implementation capacity.
"I doubt the annual development programme will be implemented," Dr. Bakht said.
Dr. Zahid Hussain, lead economist at the Dhaka office of the World Bank (WB), said the proposed budget had failed to prioritise the policies and projects.
"The finance minister has talked about all sectors but what will be the top priority in the next fiscal?" he questioned.
He said the government could not do everything in a year and it needed to prioritise policies and projects.
Dr Hussain said there were funds for the public-private partnership projects. But the government was yet to enact the required law.
"The finance minister said the bill will be placed in the parliament, but when will it be placed and when will the required rules be prepared to implement the act?"
"The budget has failed to prioritise such a type of matters that were needed to boost the investment," the WB lead economist said.
He said the budget should have emphasised prioritisation of policies to boost investments.
Experts sceptical of targeted investments as hurdles remain
Jasim Uddin Haroon | Published: June 06, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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