The government is going to cut down the interest rates on savings instruments as the yields are considered high. It is also a hindrance to enough private investment for spurring Bangladesh's economic growth.
"Savings certificates interest rates are really very high. We have discussed and reviewed the situation and you will get the results Sunday," said Finance Minister AMA Muhith while addressing a live televised budget discussion meeting at a city hotel on Friday night.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and NTV jointly organised the cutting-edge discussion session on the upcoming budget for fiscal 2015-16 at Hotel Sonargaon, where a host of experts stressed the removal of roadblocks to trade and investment.
The finance minister said the country is expecting a better economic growth in the current fiscal, as he feels the urgency of getting out of the 6 per cent GDP-growth cycle.
"The economy needs to come out from the growth trap of 6 percent maintained by the country over the last several years," he told his audience, with his sights set high on his budgeting trajectory.
"But for that we need to go for massive administrative reform. We would not be able to see a leap in the economic growth keeping the centralised administrative system intact."
Mr Muhith observed that the districts in Bangladesh are larger compared to those in other countries and stressed the need for devolution of power to expedite the country's economic growth.
"Each of our districts is like a country. We will have to decentralise the administration up to the district level, empowering them to prepare their own budget," he said.
The finance minister also defended himself for presenting ambitious budgets. "Despite being ambitious, we are implementing the huge budget," he said, adding that he wants to present a budget of Tk 7 trillion, in the end.
"Starting with a meagre amount, I wish to place a national budget worth about Tk 7.0 trillion in future."
The finance minister pointed out that the size of next fiscal year's (2015-16) budget would be around Tk 3.00 trillion.
Former finance adviser of caretaker government AB Mirza Azizul Islam, Water Resources Minister Anisul Islam Mahmud, Bangladesh Nationalist Party chairperson's adviser Enam Ahmed Chowdhury, former adviser of caretaker government Syed Manzur Elahi and distinguished fellow of the Centre for Policy Dialogue Debapriya Bhattacharya attended the programme as panellists. FBCCI president Kazi Akram Uddin Ahmed moderated the budget talk.
Aired live on NTV, the programme was attended by a large audience including businessmen, entrepreneurs, economists, traders, representatives from various government and non-governmental organisations and people from different professions.
Speakers at the meeting identified political uncertainty, high bank interests, scarcity of land, lack of power and energy, and good governance and underdeveloped infrastructure as some of the major factors hindering local investment.
"The main reason behind stagnant investment is political instability and scarcity of land. Investment will rise if you can ensure political stability and provide lands to investors," said Syed Manzur Elahi, also a former president of the Metropolitan Chamber of Commerce and Industry, Bangladesh (MCCI).
"There are as many as 1,000 applications for foreign investments, but the government fails to attract the FDI due to shortage of land," said the former adviser.
He cited the case of a large footwear company of China which produces shoes for the world-famous brands like Nike as an example.
"The company intends to employ around 35,000 people in their factory," he said.
To boost investment Mirza Azizul Islam urged the government to cut down the rates of interest from double-digit ones to single digit, reduce petroleum prices, lower the VAT rate to 10 per cent and make more allocation for social-safety nets.
The economist also demanded that the state-owned enterprises which fail to generate income and mostly depend on government allocations be closed down.
Most of the speakers at the meeting demanded lowering the prices of petroleum, VAT and other taxes to ease the burden of common people. Instead, they recommended widening the tax net.
They also sought reform of public institutions to ensure good governance, transparency and accountability.
Responding to queries from the audience, the finance minister said the government will pay heed to due demands to bring back vibrancy in the economy.
But the country, he said, does not need any more new roads. "We have decided not to build any new road rather we will concentrate more on taking care of the existing ones." The next budget would focus on renovating existing roads.
The finance minister, however, agreed about the shortage of gas supply and said the government is trying to resolve the problem through increasing the supply of liquefied natural gas (LNG).
He mentioned that tenders were floated for building liquefied natural gas (LNG) terminal in Chittagong, but failed to get response. Once built, the problem will be solved to a great extent.
The minister also pointed out that Bangladesh spends substantial sums of foreign currency every year to pay foreign experts who run the management of the country's trade and industries.
India alone draws around US$ 3.4 billion as half a million Indians are now working in Bangladesh, mostly in the readymade garment industry and in NGOs, the audience was told.
CPD distinguished fellow Mr Debapriya pointed out that there were no developments on banking-sector reform, public-private partnership (PPP) initiative, strengthening local government and pricing method of power and gas.
According to the policy analyst, revenue collection is likely to fall short of the target by an aggregate amount of Tk 250 billion in the current fiscal.
He urged the government to speed up implementation of mega- projects in time failing which the costs are inflated. He also stressed the need for utilizing more foreign aid.
mzrbd@yahoo.com
Govt may slash interests on savings certificates today
FE Report | Published: May 10, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
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