Keep inflation within 6.0pc

Containing inflation and safeguarding the vulnerable new poor should get priority while implementing the budget for the next fiscal year, economists told a roundtable on Saturday.

Proper implementation of the social safety-net programme, capacity building ahead of LDC graduation, and making the tax regime more efficient are also vital for economy, they said.

Unnayan Shamannay (UnSy), a non-governmental research and development entity, hosted the roundtable styled 'Budget Review 2023-24' at its Banglamotor office.

Former Bangladesh Bank governor and UnSy chairperson Dr Atiur Rahman, Dhaka University (DU) economics professor MM Akash, East West University professor AK Enamul Haque, UNDP country economist Dr Nazneen Ahmed and DU professor M Abu Yusuf, among others, spoke.

At the onset of the discussion, Dr Atiur said three issues were crucially important in the budget, including containment of inflation, challenges to revenue collection and social safety-net programmes.

If it is possible to keep inflation within 6.0 per cent as per the new target amid the ongoing global crisis, according to him, it will be a noteworthy achievement.

"In fact, how much inflation is being contained should get policy priority rather than whatever the GDP growth reaches," said Dr Atiur.

The ex-governor feared that government borrowings from banks could further escalate inflation.

Prof Akash said shrinkage in employment opportunities and people's earnings have resulted in creating many new poor, thereby creating pressure on the economy.

Containing inflation should, therefore, be the key concern now, he observed.

He called for keeping subsidies in general, suggesting that the government give priority to food and energy security with its subsidy mechanism.

Prof Enamul underscored the need for framing a prudent policy for taxation as irrational taxation leads to capable people migrating to other countries and opening overseas businesses.

"Our tax structure needs a major reform. If a person somehow pays extra tax, there is no provision to refund it," he said. Regarding inflation, the professor said a mismatch between demand and supply is a key reason behind this galloping inflation.

He suggested that the budget duly address this issue to ensure transparency in demand and supply.

Dr Nazneen said the new poor have emerged in the country due to the impacts of the Covid-19 pandemic, coupled with domestic and global crises.

There is a need for making specific targeted programmes for the people living close to the poverty line as they might fall below the poverty level, she observed.

About boosting tax revenue, the UNDP economist said the country should focus more on skills development of the taxman to this end.

"When we graduate from LDC, there will be more inflow of foreign investment and companies," she said, adding that it is high time to invest on tax people to brace for the future.

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