Finance adviser, political leaders wide apart over impact of duty structure

FE Team | Published: June 22, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
Finance and planning adviser Mirza Azizul Islam has differed with the opinions by former ministers and lawmakers that the proposed duty structure for the new fiscal will destroy the local industry and turn the country into a market of foreign goods.
"It is not that the local industry will be destroyed because of the proposed duty structure. What will happen is that the proposed duty structure will cut the profit margin of the local producers," he said while speaking at the post-budget discussion organised by Economic Reporters' Forum (ERF) at CIRDAP Thursday.
But the former ministers and lawmakers from both Awami League (AL) and Bangladesh Nationalist Party (BNP) and leaders of other political parties, who took part in the discussion, urged the caretaker government to review the duty proposals to protect the local industries.
"Local producers may not make profit as they used to," the adviser said.
Under an emergency rule and in the absence of parliament the participation of former ministers Tofail Ahmed, MK Anwar and former lawmakers Rashed Khan Menon, Faruqe Khan, GM Quader, Zahiruddin Swapan and Quamruzzaman made the budget discussion interesting.
Moderated by ERF president Zakaria Kajol, the speakers also shed light on budgetary measures such as allocation for agriculture and power sectors and laid the emphasis on realistic measures to stabilise the commodity market and tame inflation.
Some of the speakers termed the budget as realistic and some others viewed it as ambitious in respect to the projection of revenue collection and foreign grants.
Pointing to the opposing views by the former lawmakers and politicians, the finance and planning adviser said there is no Aladin's Lamp to address all such issues.
Most of the speakers, however, stressed the need for strong administrative role and monitoring system for a successful implementation of the 'big-size' budget and called for allowing duty-free import of computer and its accessories.
Former agriculture minister MK Anwar said reform in the ministry of finance and planning commission is a dire necessity as successful implementation of the new budget will be difficult without reform in this two key offices.
He also urged the government to provide full autonomy to the central bank and introduce a mechanism to keep the local market stable.
"The government should not remain indifferent in the name of open market economy," he said while highlighting the need for government mechanisms including introduction of alternative supply chain for stabilising the commodity prices.
Former commerce minister Tofail Ahmed said the caretaker government should maintain a coordination among the key functionaries like the commerce ministry and the revenue board.
"The coordination is essential so that the government can take immediate measures like duty readjustment on imported commodity items to keep the market stable," he said adding that it received good response by taking such measure during the past AL government.
The finance and planning adviser appreciated the suggestions of alternative supply chain along with the existing one. He said the government will support if non-government organisations (NGOs) come forward to establish the alternative supply chain.
Rashed Khan Menon said the government should introduce a market intelligence unit and reintroduce food rationing system, which were suspended at the advice of a lending agency.
He criticised the present government's soft-line on the recommendations of the donor agencies saying that since it has no political ambition, it should not show such an attitude towards the multi-lateral capital lenders.
Quamruzzman said the country should reduce dependence on the lending agencies.
Some 13.5 per cent of the total budget has been kept for payment of overall interest and the amount of overseas grant has been projected at almost double the level over that of the outgoing fiscal, he said while noting it as worrying.
Most of the speakers thanked the caretaker government for introducing diesel subsidy in addition to existing agricultural and electric subsidy and expansion of social safety net.
They have, however, celled upon the government to ensure proper targeting of the subsidy.