Budget ambitious, but challenging, says IBFB

International Business Forum of Bangladesh (IBFB) on Monday welcomed the proposed budget for the next fiscal year terming it ambitious, inspiring and challenging.

Despite the big size, leaders of the forum at a press conference said that achieving the revenue target is not impossible and stressed the need for taking some strong measures to achieve the targets of the budget.

They urged the government to take immediate measures to improve the infrastructure, reform administration and ensure good governance and political stability to achieve the revenue target.Finance Minister Abul Maal Abdul Muhith placed the budget proposals on May 4 for fiscal year (FY) 2015-16 in parliament with an outlay of Tk 2.95 trillion with a thrust on increasing revenues to meet at least two-thirds of the budgetary allocations.

The government set a target of 7.0 per cent GDP (gross domestic product) growth for the next fiscal and set the spending targets for different sectors accordingly from the outlay.

"The topmost challenge of the budget is mobilisation of revenue and its appropriate spending," said IBFB President Hafizur Rahman Khan while speaking to journalists at the conference held at the National Press Club. He was assisted by IBFB former president Mahmudul Islam Chowdhury and former Chairman of the Tariff Commission Dr. Mujibur Rahman.The government set the target to finance the budget from domestic borrowings worth about Tk 565.23 billion and external sources Tk 301.34 billion.

Of the domestic resources, Tk 385.23 billion will come from banking sectors which might constraint the private sector credit flow.  But the IBFB leaders ruled out the possibility of liquidity crisis saying that banks are struggling with huge idle money.

To achieve the revenue target they underscored the need for reforming the revenue administration, strengthening government institutions, and increasing their efficiency, accountability as well as transparency.

They, however, welcomed the government decision for setting up 30 economic zones and demanded adequate allocation for development of the zones. To encourage industrialisation they also demanded lowering the inertest rate to a single digit.They also urged the government to increase the allocations in education and health sectors with reduction of 10 per cent VAT imposed on private universities. The IBFB hailed the incentives the government declared for the country's capital market.

 They hoped that the incentives proposed in the new budget will attract more companies into going public in the capital market for further expansion, which will accelerate industrialisation in the country.

    mzrbd@yahoo.com