Present higher trend of revenue generation must continue

---

FE Report
Editors of four newspapers and one news agency suggested Thursday in a pre-budget discussion with the finance adviser that the present higher trend of revenue generation must continue in the next fiscal to meet the growing demand for subsidy.
"The media representatives asked whether the government would be able to maintain the present growth of revenue collection in the future," said finance and planning adviser Mirza Azizul Islam after the meeting.
The editors expect the government to maintain the present revenue generation growth in the next fiscal to meet the growing demand of subsidy, he said.
One editor expressed doubt about the possibility of achieving ongoing poverty reduction strategy targets due to soaring food prices and its impact on purchasing power, sources said.
The Financial Express editor Moazzem Hossain, Prothom Alo editor Matiur Rahman, Bangladesh Today editor Mahmudur Rahman Choudhury, Bhorer Kagoj editor Shyamol Datta and bdnews24.com editor-in-chief Toufique Imrose Khalidi attended the pre-budget discussion.
The Adviser said all the quarters he has so far met in pre-budget discussions, including the economists, former finance advisers and finance secretaries, were of the opinion that something had to be done to provide relief to fixed income earners and poor people failing to buy food.
"But nobody came up with any concrete suggestion," he said.
To a query, he said providing 15 million people as suggested by former adviser Akbar Ali Khan with 1-1.5 kg rice is not possible.
"One has to think of the resources required to feed them free." he said.
"The budgetary allocation on subsidy to items like fertiliser, food, fuel oil has already doubled due to their price hike in the international market,"
Mirza Aziz said, adding that the government has no option other than the ongoing measures to mitigate hardship of the people, caused by high prices of food.
The finance and planning adviser said the present subsidy regime needs to be adjusted to some extent to make it time-befitting.
He also said there is a wrong perception among the editors that the government could have utilised the high foreign exchange reserve to help bring down the food prices.
"But it is not a government property," he said, adding that foreign exchange reserve was not that high compared to the levels the neighbouring countries have in their central banks.
The country should have a reserve equivalent to three months' import payment. The present per month import payment bill is around US $ 1.6 billion to $ 1.8 billion.
The adviser said the editors suggested that the government should give focus on agricultural sector, stop unnecessary expenditure, adopt realistic annual development programme and increase incentives to sugar and jute industries.
He said the government has already identified agricultural sector as a priority one. But, he said, there is no score to provide incentives to sugar and jute industries.
UNB adds: The finance adviser said the foreign exchange reserve that reached over US$ 6.0 billion was not too big in view of the increased bills for food import. Until March 15 of the current fiscal year, rice import stood at 3.0 million tonnes, which is 0.6 million tonnes higher than the total import of 2.4 million tonnes in the previous fiscal year.
"Financing the increased import would have been difficult if we did no have that reserve position," said the Adviser.
Mirza Aziz said the editors also stressed the need for accelerating the pace of implementation of the Annual Development Programme (ADP). They recommended giving more emphasis on the agricultural sector in view of the high food prices, and offering more incentives to agro-based industries like jute and sugar mills.
About increased incentives to agro-based industries, the Adviser told the meeting that the industries would have to raise their productivity and efficiency.
He said the main incentive for RMG industry is duty-free import of raw materials under bonded facility. But the agro-based industries have no such scope as they use local raw materials.
About ADP implementation, he apprised the editors that the government's attention was diverted from the development works due to floods and later the cyclone Sidr.
Increase in prices of construction materials also hindered the progress of development works, he added.
"We've no other option at this moment without strengthening and widening the ongoing social safety net programmes," he told reporters, replying to a question after a pre-budget meeting with editors of print and electronic media at the Finance Ministry.
The Adviser said all the quarters he has so far met in pre-budget discussions, including the economists, former finance advisers and finance secretaries, were of the opinion that something has to be done as the family budget is failing to buy food.
"What could be that 'something'? Nobody came up with any concrete
suggestion," he said.
Dr Aziz said that the present subsidy regime needs to be adjusted to some extent to make it sustainable. "We've not yet decided to reduce or increase the subsidy," he said, replying to a question.
Dr Aziz said the media representatives asked whether the government would be able to maintain the present growth of revenue collection in the future, and whether the government could reduce unproductive expenditure.
They also stressed the need for accelerating ADP implementation. They recommended giving more emphasis on the agriculture sector in view of the high food prices, and considering more incentives for agro-based industries like jute and sugar mills.
bdnews24.com adds: The Finance Adviser said the economy is "definitely not in a shambles", but it is going through difficult times at the pre-budget views-exchange meeting with editors. As the cry for reviewing subsidies gets louder, raising revenue would be the key, editors of national dailies and electronic media told the adviser.
Fuel, fertiliser and food are the top claimants for subsidies, now running into billion of takas.
The adviser said that the social safety net would be stretched as far as possible in the forthcoming budget.
The government is facing problems in its efforts to tackle spiralling prices countrywide, Mirza Aziz conceded.
The adviser and civil servants claimed credit, however, for increased revenue collection during the current fiscal-though one editor wondered whether it was not emergency rule rather than government policy that was forcing people to pay taxes.
Mirza Aziz and National Board of Revenue (NBR) Chairman Abdul Majid said efforts would be made to further strengthen the revenue collection efforts so that such gains were permanent.
"The fear factor" was also mentioned by the editors in this regard.
"All undisclosed money is not necessarily corruption-tainted," Moazzem Hossain, editor of The Financial Express, said.
Moazzem also voiced scepticism about the government's poverty reduction strategy being effective under the current climate of economic crisis.
Mahmudur Rahman Choudhury, a retired colonel and editor of Bangladesh Today, suggested military spending be brought down.
"You could at least do away with the development budget of the military while keeping the maintenance expenses at regular levels," he said.
Editor of Prothom Alo Matiur Rahman asked if the high forex reserves could be used to help the people reeling from food shortages.
Slow implementation of the ADP was also highlighted by the editors.
The adviser agreed with the suggestion that the ADP should be brought down to realistic proportions.
Following the pre-budget meeting with the editors, Mirza Aziz told reporters at the finance ministry: "Bangladesh is facing multi-faceted effects of the global increase in food and other commodity prices."
"We in the government are making utmost efforts to keep the spiralling food and commodity prices within the reach of the people."
"But we're seeing very little success as the nation is passing very hard times over this issue."
The social security net will be considerably widened when drawing up the forthcoming budget with a view to keeping commodity prices within people's reach, the adviser said.
The adviser said the editors had expressed satisfaction over the government's enhanced revenue earnings. "They also urged the government to take necessary steps to sustain the current trend," the adviser added.
The editors also suggested that the government augment agricultural production and initiate agro-based industries, while cutting expenditure in the non-productive sectors, he said.
"Detailed discussions were held with the editors over the foreign currency reserves. Many pointed out that the Bangladesh Bank has kept reserves in excess," Mirza Aziz said.
"I've cleared the government's position in this regard while talking to them."
The finance adviser said five billion dollars was not a vast amount. "One has to keep at least an amount of foreign currency which should be adequate to meet the country's import costs for three months."
"What we have now would just foot the bill for three and a half months' imports."
On the government side, NBR chairman Mohammad Abdul Majid, commerce secretary Firoz Ahmed, ERD secretary Aminul Islam Bhuiyan and planning secretary Jafar Ahmed Chowdhury were among those present at the pre-budget discussion meeting.
The finance adviser said the government would not further recruit Class IV employees as part of efforts not to increase the size of its payroll.
The government has already started recruiting data entry operators and system analysts instead, in a gradual move towards building an information technology (IT)-equipped work environment, he said.
However, the adviser said, no existing Class IV employees would be retrenched.
Mirza Aziz mentioned that a large part of the government salary bill is spent on the Class IV employees.
The issue was raised at the adviser's pre-budget discussion meeting with several editors of newspapers and electronic media at the finance ministry.