Food inflation big challenge for govt

Finance Minister A M A Muhith said on Wednesday controlling the prices of essentials at wholesale level is impossible. Rather, it will be pragmatic to target few items and keep their prices at a reasonable level, he stated. "I have suggested to my colleagues to limit their target to keeping the prices of rice, wheat, sugar and edible oil at a 'fair' level," he said. The finance minister was speaking as the chief guest at a seminar titled 'State of the economy and challenges ahead,' at a city hotel. The target should not be beyond that, he said, adding, a mechanism should be developed to ensure fair prices of wheat, sugar and edible oil, following the success of open market sales (OMS) programme about rice. Bangladesh Institute of Development Studies (BIDS) organised the seminar, chaired by its director general Dr Mustafa K Mujeri. BIDS senior research fellow Dr Nazneen Ahmed presented keynote paper in the seminar. "When I was not in the government, my perception was that price control of essentials was possible," said Muhith. "But it is not that easy," he admitted. The finance minister also expressed his concern over the increasing population in Bangladesh. He cautioned all concerned that the country might be in deep trouble, if the population boom cannot be controlled. He said keeping the posts of 29,000 family welfare assistants vacant during the past 10 years was wrong, as it contributed to increasing population growth rate at a high level. The government has emphasised the need for consultation to help control the growth of population, he said, adding that the female members of parliament (MPs) can play a significant role in this regard. In her keynote presentation, Dr Nazneen Ahmed noted the national economy is currently going through various challenges like high rate of inflation, pressure on balance of payment and exchange rate, lack of adequate infrastructure, and poor implementation of the annual development programme (ADP). "There are some evidences that the economy is doing well. But to keep it on a smooth track it is critically important to face the challenges prudently is also important," she said. Higher revenue collection, increased agricultural output, and enhanced export earnings and import growth reflect that the country's economy is on the right track, said Dr Nazneen. She said the country has a healthy foreign currency reserve, amounting to US$ 10.7 billion. However, there might be pressure on the reserve due to high growth of import and a declining trend of remittance inflow. "Only 4.0 per cent growth in remittance inflow was seen during the July-March period of the current fiscal, which was 32 per cent in fiscal 2007-08," said Dr Nazneen. She also pointed out that the policy of the Bangladesh Bank (BB) on inflation and management of money supply was contradictory. Echoing the challenges as revealed in the keynote paper, the finance minister said power and energy shortages, a declining trend of remittance growth, and increase in import of food items and petroleum products are also matters of concern for the country's overall economy. Taking part in the discussion, Prof Ali Ashraf MP observed that the government should extend the tax-net and address effectively the unemployment problem for ensuring sustained growth of the national economy. The government should also review the income tax returns, especially of the businessmen to help check evasion, he suggested. Moderating the session, Chairman of the Parliamentary Standing Committee on Public Accounts Dr Mohiuddin Khan Alamgir urged the government not to impose 'over-control' on the country's stock market, which he feared, might deter its smooth growth. "I urge the government not go for 'excess control' over the country's stock markets," he observed. Alamgir, also a former state minister for planning during the previous tenure of the Awami League (AL) government, made the observation against the backdrop of growing demand to make the report of probe committee on share market scam, public. He termed the report as being 'based on perception.' There are no example of over-interference in any stock market across the globe, he pointed out. He also stressed that proper honour should be shown to those who have provided employments to thousands of workers in the country. The state should recognise their contributions, he said. Alamgir said there should be a change in the mindset of all concerned for properly recognising the role of those who created employment opportunities in the economy. Dr Mohiuddin Khan Alamgir underlined the need for bringing about changes in tax collection system and utilise the tax-revenues in a prudent manner He also suggested for expansion of development budget and to focus on the needs for taking appropriate policy supports to help raise the level of investment in the private sector, which he pointed out, contributes to around 82 per cent of the country's gross domestic product (GDP). BSS adds: Expressing concern over the country's bulging population, Finance Minister AMA Muhith on Wednesday said the national economy is facing additional challenges from the burden of higher population. He suggested effective steps to control the fast growing population and advised women parliamentarians take special responsibilities for making mass awareness about the benefit of the population control. Muhith said at the seminar on the state of the country's economy, the next budget would give special emphasis on controlling population because the country would face many problems without controlling its populace. He said a total of 29,000 people would be appointed against the vacant posts at the field level for family planning. Parliamentarians including senior Awami League leaders and Jahanara Begum took part in the panel discussions. The finance minister stated at the seminar the Trading Corporation of Bangladesh (TCB) is trying to maintain steady supply of the four essential goods to the market to help keep their prices at an affordable level for the common people. The finance minister observed that there is a problem in the food supply chain, which is creating an artificial shortage in the market. UNB adds: Responding to questions raised by the MPs present at the seminar, AMA Muhith said the government wants consultations for formulation of the budget, and the door of the Finance Minister would always remain open for receiving any recommendation. "It's not my own budget. It's the outcome of the thoughts of many people." About the recently held census, Muhith said the population would increase to a large extent. "But there was a problem that the data collectors were not well-trained." In her keynote paper, Dr Nazneen Ahmed said inflation, especially food inflation continues to be a big challenge for the government and rising rice price is a puzzle in the backdrop of good harvest. She suggested for imports in right time from right sources and qualitative and quantitative procurement by the government. Dr. Nazneen said the national budget is an important planning document of the government and members of parliament have crucial roles to play in budget formulation and correcting anomalies to ensure a good and implementable budget. She pointed out that Bangladesh Bank policy on inflation and management of money supply was contradictory. "They are increasing reserve money supply while increasing the reserve ratio." This will discourage investment and raise the import cost, she observed.