DCCI wants govt to be more specific on power, energy
Saturday, 12 June 2010
FE Report
Dhaka Chamber of Commerce & Industry (DCCI) Friday hailed the ensuing fiscal years budget, saying the priority to power, energy and transportation sectors will set a roadmap of the infrastructure development of the country.
The Chamber at a meeting chaired by its president Abul Kasem Khan in the city also hailed the budget - unveiled Thursday - as a milestone towards achieving higher GDP growth at 6.7 per cent in order to achieve the Vision 2021 target.
Infrastructure development is considered a pre-condition for the development of Bangladesh. The budget has allocated Tk 61.15 billion for power and energy sectors.
The DCCI, however, said the government should reconsider the allocation in the sector in order to come out of the existing power and energy crisis.
"Allocation in unproductive sectors should be reduced to allow more in power and energy," said Mr Khan.
The DCCI suggested timely implementation of the projects under annual development programme (ADP) in power and energy sector, required to achieve the targeted GDP growth.
The Chamber said the budget has not specified the critical elements of energy-related issues like coal policy. "The importance of coal, LPG and LNG has been mentioned, but a stipulated timeframe should have been mentioned in the budget in creating business confidence and boosting investment."
It demanded an appropriate Coal Policy for ensuring energy security. It also appreciated the proposal for capacity building of BAPEX, adding it will enhance gas exploration.
The Chamber also expressed concern at not allocating any fund exclusively for improvement of Dhaka City Transportation and Traffic System - one of the serious concerns of the private sector.
The budget proposal to construct a 32-km elevated expressway from Uttara to Jatrabari as well as a number of fly-overs and overpasses for easing the traffic congestion in the capital also drew the chamber's appreciation.
"These will not be enough in managing the ever- increasing traffic load of Dhaka city, which is considered as contributing to the high cost of doing business in Bangladesh and causing huge loss of working hours," the Chamber said.
The Chamber lauded the government's overall plan to modernise the ailing Bangladesh Railway under a 20-year master plan to be announced soon.
The budget has made an allocation of Tk 75.49 billion for roads and railways, which is 26 per cent higher than that of last fiscal year.
"We welcome this increase but would like to see a separate ministry for railways with exclusive allocation for accelerating the development of railways. Rail network within Dhaka city should be given priority in order to reduce traffic congestion on the road."
The DCCI appreciated the vision of establishment of Deep Sea Port and development of 12 different ports under build-own-transfer (BOT).
The Chamber also criticised the budget as it did not give any special attention to the Dhaka - Chittagong Economic Corridor (DCEC). "DCEC will help decentralise Dhaka-centric growth. Proper development of this economic corridor will increase GDP growth by additional 1.0 per cent."
The chamber demanded fast implementation of the Special Economic Zones (SEZ) policy.
The DCCI hailed allocation of Tk 30.0 billion under PPP initiatives in the budget. "Legal framework should be finalised at the earliest, otherwise private investors will not feel confident to invest in projects under the PPP model," said the Chamber welcoming the allocation of Tk 16.0 billion for Bangladesh Infrastructure Financing Fund (BIFF).
The Chamber also questioned the logic of 12 per cent duty on energy saving components imported by commercial firms.
The DCCI thanked the government for introducing the TAX CARD with a view to expanding the tax net.
"We think this will help generate tax payer's confidence. We believe that the scheme would be widened in the coming years, so that all tax payers are given special privileges," said Mr Khan.
The Chamber said the budget proposal to increase tax offices in the country would increase revenue expenditure and people's harassment. "The government should consider automation in submission of tax return to reduce administrative expenditure of Taxation Department."
The Chamber appreciated the proposal to increase turnover tax facility limit to Tk 6.0 million from Tk 4.0 million.
The government should revert to the existing rate in order to promote small and medium enterprises (SMEs).
The Chamber views as a positive step the proposal of withdrawal of VAT and reduction of duty on certain raw materials, which will encourage industrialisation.
Manufacturing of refrigerators, freezers, motor cycles and energy saving bulbs have been made duty-free and raw materials of these items have also been given such benefit. These facilities will surely benefit these sectors, the chamber said.
"But there should be reduction of lowest slab of duty on all industrial raw materials from 5.0 per cent to 3.0 per cent to encourage SMEs to flourish further."
Continuation of 5.0 per cent regulatory duty is also encouraging, the Chamber said.
The Chamber criticised the budget proposal for discontinuing privatisation of state-owned enterprises (SoEs). "Privatisation of SoEs should continue. The government should not be in business but only in governance."
Dhaka Chamber of Commerce & Industry (DCCI) Friday hailed the ensuing fiscal years budget, saying the priority to power, energy and transportation sectors will set a roadmap of the infrastructure development of the country.
The Chamber at a meeting chaired by its president Abul Kasem Khan in the city also hailed the budget - unveiled Thursday - as a milestone towards achieving higher GDP growth at 6.7 per cent in order to achieve the Vision 2021 target.
Infrastructure development is considered a pre-condition for the development of Bangladesh. The budget has allocated Tk 61.15 billion for power and energy sectors.
The DCCI, however, said the government should reconsider the allocation in the sector in order to come out of the existing power and energy crisis.
"Allocation in unproductive sectors should be reduced to allow more in power and energy," said Mr Khan.
The DCCI suggested timely implementation of the projects under annual development programme (ADP) in power and energy sector, required to achieve the targeted GDP growth.
The Chamber said the budget has not specified the critical elements of energy-related issues like coal policy. "The importance of coal, LPG and LNG has been mentioned, but a stipulated timeframe should have been mentioned in the budget in creating business confidence and boosting investment."
It demanded an appropriate Coal Policy for ensuring energy security. It also appreciated the proposal for capacity building of BAPEX, adding it will enhance gas exploration.
The Chamber also expressed concern at not allocating any fund exclusively for improvement of Dhaka City Transportation and Traffic System - one of the serious concerns of the private sector.
The budget proposal to construct a 32-km elevated expressway from Uttara to Jatrabari as well as a number of fly-overs and overpasses for easing the traffic congestion in the capital also drew the chamber's appreciation.
"These will not be enough in managing the ever- increasing traffic load of Dhaka city, which is considered as contributing to the high cost of doing business in Bangladesh and causing huge loss of working hours," the Chamber said.
The Chamber lauded the government's overall plan to modernise the ailing Bangladesh Railway under a 20-year master plan to be announced soon.
The budget has made an allocation of Tk 75.49 billion for roads and railways, which is 26 per cent higher than that of last fiscal year.
"We welcome this increase but would like to see a separate ministry for railways with exclusive allocation for accelerating the development of railways. Rail network within Dhaka city should be given priority in order to reduce traffic congestion on the road."
The DCCI appreciated the vision of establishment of Deep Sea Port and development of 12 different ports under build-own-transfer (BOT).
The Chamber also criticised the budget as it did not give any special attention to the Dhaka - Chittagong Economic Corridor (DCEC). "DCEC will help decentralise Dhaka-centric growth. Proper development of this economic corridor will increase GDP growth by additional 1.0 per cent."
The chamber demanded fast implementation of the Special Economic Zones (SEZ) policy.
The DCCI hailed allocation of Tk 30.0 billion under PPP initiatives in the budget. "Legal framework should be finalised at the earliest, otherwise private investors will not feel confident to invest in projects under the PPP model," said the Chamber welcoming the allocation of Tk 16.0 billion for Bangladesh Infrastructure Financing Fund (BIFF).
The Chamber also questioned the logic of 12 per cent duty on energy saving components imported by commercial firms.
The DCCI thanked the government for introducing the TAX CARD with a view to expanding the tax net.
"We think this will help generate tax payer's confidence. We believe that the scheme would be widened in the coming years, so that all tax payers are given special privileges," said Mr Khan.
The Chamber said the budget proposal to increase tax offices in the country would increase revenue expenditure and people's harassment. "The government should consider automation in submission of tax return to reduce administrative expenditure of Taxation Department."
The Chamber appreciated the proposal to increase turnover tax facility limit to Tk 6.0 million from Tk 4.0 million.
The government should revert to the existing rate in order to promote small and medium enterprises (SMEs).
The Chamber views as a positive step the proposal of withdrawal of VAT and reduction of duty on certain raw materials, which will encourage industrialisation.
Manufacturing of refrigerators, freezers, motor cycles and energy saving bulbs have been made duty-free and raw materials of these items have also been given such benefit. These facilities will surely benefit these sectors, the chamber said.
"But there should be reduction of lowest slab of duty on all industrial raw materials from 5.0 per cent to 3.0 per cent to encourage SMEs to flourish further."
Continuation of 5.0 per cent regulatory duty is also encouraging, the Chamber said.
The Chamber criticised the budget proposal for discontinuing privatisation of state-owned enterprises (SoEs). "Privatisation of SoEs should continue. The government should not be in business but only in governance."