FICCI concerned over heavy bank borrowing
Saturday, 13 June 2009
FE Report
The Foreign Investors' Chamber of Commerce & Industry (FICCI) termed Friday the budget as ambitious but it hailed some budgetary proposals.
In a statement, the FICCI President Waliur Rahman Bhuiyan hailed Friday the budgetary proposals, especially those related to social safety-net, agriculture, education, communications and environment sectors.
The Chamber also appreciated the introduction of the Private Public Partnership (PPP) and infrastructural development measures with special emphasis on power generation.
"The Chamber appreciates the measures especially in the agriculture, social security & welfare, ICT & education, communication and environment sectors," a FICCI statement said.
The FICCI said the proposed budget of Tk 1138.19 billion, which is 20.90 per cent higher than that of the outgoing fiscal is somewhat 'ambitious' with possible heavy dependence on bank borrowing.
The FICCI also suggested that strong monitoring would be required to achieve the goals.
The Chamber said the budget for FY 2009-10 is heavily dependent on borrowings from banking systems, which may tighten the liquidity situation, cause an upward trend in deposit rates with consequent effects on lending rates thus making funding of trade, commerce and industries costlier.
It also said the scope of disclosing the undeclared income that has been proposed in the budget could discourage the honest taxpayers.
"While appreciating the measures to protect local industries introducing Regulatory Duty and enhancing the rate of Supplementary duty on imported finished goods, the Chamber feels that its application should not be extended to products not manufactured locally since this may add to inflationary pressure," it said.
It also expressed the concerned over introduction of duty on import of newsprint.
The FICCI, however, said the proposed budget has not addressed the recommendations made earlier by the Chamber.
It mentioned that despite the recommendations from different chambers and trade bodies, the rate of corporate tax on banks, financial institutions and mobile operators had not been considered.
"There was a strong recommendation from different chambers that the price declaration under VAT would only be required in case of changes in product price," it said.
However, no step has been taken in the proposed budget to eliminate the long-standing suffering of the manufacturers in this regard.
In spire of strong recommendation, depreciation allowance on financial lease has not been restored, it said, adding that it would continue to impact the lease financing, a crying need for industrial growth.
"FICCI feels that the proposed budget with necessary amendments will help achieve its goals," the FICCI statement said.
The Foreign Investors' Chamber of Commerce & Industry (FICCI) termed Friday the budget as ambitious but it hailed some budgetary proposals.
In a statement, the FICCI President Waliur Rahman Bhuiyan hailed Friday the budgetary proposals, especially those related to social safety-net, agriculture, education, communications and environment sectors.
The Chamber also appreciated the introduction of the Private Public Partnership (PPP) and infrastructural development measures with special emphasis on power generation.
"The Chamber appreciates the measures especially in the agriculture, social security & welfare, ICT & education, communication and environment sectors," a FICCI statement said.
The FICCI said the proposed budget of Tk 1138.19 billion, which is 20.90 per cent higher than that of the outgoing fiscal is somewhat 'ambitious' with possible heavy dependence on bank borrowing.
The FICCI also suggested that strong monitoring would be required to achieve the goals.
The Chamber said the budget for FY 2009-10 is heavily dependent on borrowings from banking systems, which may tighten the liquidity situation, cause an upward trend in deposit rates with consequent effects on lending rates thus making funding of trade, commerce and industries costlier.
It also said the scope of disclosing the undeclared income that has been proposed in the budget could discourage the honest taxpayers.
"While appreciating the measures to protect local industries introducing Regulatory Duty and enhancing the rate of Supplementary duty on imported finished goods, the Chamber feels that its application should not be extended to products not manufactured locally since this may add to inflationary pressure," it said.
It also expressed the concerned over introduction of duty on import of newsprint.
The FICCI, however, said the proposed budget has not addressed the recommendations made earlier by the Chamber.
It mentioned that despite the recommendations from different chambers and trade bodies, the rate of corporate tax on banks, financial institutions and mobile operators had not been considered.
"There was a strong recommendation from different chambers that the price declaration under VAT would only be required in case of changes in product price," it said.
However, no step has been taken in the proposed budget to eliminate the long-standing suffering of the manufacturers in this regard.
In spire of strong recommendation, depreciation allowance on financial lease has not been restored, it said, adding that it would continue to impact the lease financing, a crying need for industrial growth.
"FICCI feels that the proposed budget with necessary amendments will help achieve its goals," the FICCI statement said.