Budget targets \\\'ambitious\\\' but attainable: Muhith

Finance Minister AMA Muhith Friday said the proposed budget for the fiscal year 2014-15  despite being 'ambitious' is realistic and quite 'achievable'.
"The budget is definitely an ambitious one and I have been doing it since the very first one (budget). It is beneficial to the country," the Finance Minister said in reply to a question at his post-budget press conference held at the city's Osmani auditorium.
Planning Minister AHM Mustafa Kamal, Agriculture Minister Motia Chowdhury, Information Minister Hasanul Hoque Inu and State Minister for Finance MA Mannan, Finance Secretary Fazle Kabir, chairman of the National Board of Revenue (NBR) Md Ghulam Hussain and Bangladesh Bank Governor Dr. Atiur Rahman were also present at the press conference.
Asked about the risks of political violence in the upcoming fiscal, the Finance Minister said the path of violence should be avoided.
"We can do nothing on the issue. But we can appeal to all the politicians (to shun violence)," he said.
Mr. Muhith ruled out the possibility of the deficit and the bank borrowing crossing the projections made in the budget for the next fiscal.
"We're quite in the right direction about deficit as we have been maintaining the same below 5.0 per cent each year," he said.
The Finance Minister said the budget documents did not include data measured on the new base year of 2005-06 following 'time constraint'.
"We did not get the data timely. We expect that we will start using the same from the next fiscal year," he said.
The Finance Minister, however, admitted that some economic indicators turned out to be lower while calculating those using the new base year data.
"We get tax-GDP ratio at around 10 per cent while under the old base year, it is over 13 per cent," he said.
He said such type of issue will be addressed in the next year's budget.
Replying to a question relating to the funding from the external sources, Mr Muhith said those who have been talking about poor disbursement are not aware of the real data.
"The disbursement has been rising by Tk 7.0 billion each year," he said, adding that the aid in the pipeline so far stood at US$19 billion.
The Finance Secretary informed the newsmen that the government had borrowed Tk 149.84 billion from the banking system up to April. He said Tk 50 billion more might have been added in the month of May.
Justifying the tax measures on the mobile set and gold, the Finance Minister said these have been taken after due scrutiny and it will help raise revenues.
"We have nearly 100 million mobile subscribers. It is easy to collect tax at source," Mr. Muhith said.
Explaining tax imposition on mobile sets, the NBR chairman argued that this would ensure a level playing field for the local set manufacturers.
"There was no protection for the local mobile set manufacturers, rather the local manufacturers used to pay 15 per cent tax. From now on, the importers will have to pay taxes," he said.
Mr Muhith said gold remained for long out of effective tax net.
"There was very marginal tax on gold imports. It will be really a good source of revenue," he said.
He said: "When the NBR officials informed us about it, we all accepted it unanimously."
The Finance Minister said the government did not manipulate gross domestic product (GDP) data prepared by the BBS (Bangladesh Bureau of Statistics).
He said the allegation made by the Centre for Policy Dialogue (CPD) on the issue is totally baseless.
The Finance Minister said the advance income tax provision will prevail.
Mr. Muhith said he has tried many times to reduce the rate of interest on bank lending.
"The lending rate is not dropping due to high rate of interest on deposits," the Finance Minister noted.
"Actually, our interest rates on bank deposits are too high. This should be equivalent to the rate of inflation," he said.
Speaking at the press conference, Planning Minister AHM Mostafa Kamal said the budget placed for the next fiscal year is a meaningful one.
He said the GDP target for the next fiscal year is achievable.
Mr. Kamal said the share of investment as a percentage of GDP is more than 28 per cent in the country and it is quite okay in line with the growth target.
He, however, emphasised on the greater private investment inflow.
He said there are many incentives for investors in the budget. "I think private sector will make investments," the Planning Minister said.
He said the foreign direct investment has been growing each year.
 "The foreign investment had never exceeded US$1.0 billion in the past, but now it stood at US$1.7 billion in the last year," Mr Kamal said.
NBR chairman Ghulam Hussain said the revised target for collection of Tk 1,250 billion tax revenue for the outgoing fiscal year is achievable.
"We're just on the target path… we are expecting that the revenue target will be achieved within June," he said.
Explaining tax on house rent, the NBR chairman said his office will issue detailed rules on the issue within June 30.
He said the NBR will be able to detect the real scenario about house rent tax dodging after seeing bank transactions.
He said the NBR will impose penalties if any landlord evades income tax from the source.
He said: "The penal rent will be 50 per cent if the landlord found evading tax from the source."
Replying to a question relating to possible rise in the price of kitchen products, the NBR chairman said taxes have been rationalised in the case of many items.
"Soyabean oil is now getting the benefit, other edible oils like corn, sun flower will also get the benefit," he said.
Speaking at the briefing, Bangladesh Bank governor Dr Atiur Rahman said the private sector credit now stands at 16.2 per cent against its target of 16.5 per cent.
The BB governor said the rate of inflation is coming down and this is due to a prudent monetary policy.
"We carefully prepare the monetary policy so that it cannot create inflationary pressures on the economy," he said.
He said the growth of broad money and reserve money was kept below the target just to keep the inflationary pressure tolerable.