The global economy has been hit hard yet again, by the ongoing war between Russia and Ukraine, before even recovering from the disruptions brought by the pandemic.
To keep up with the escalating crisis that is ongoing, businessmen and traders of the country have demanded the continuation of subsidies in certain sectors including energy and agriculture in the upcoming budget for the 2022-23 fiscal year.
They also made demands for reduction of corporate tax and an expansion of the tax coverage instead of raising value added tax (VAT) in the upcoming budget, as well as urging the government to take initiative in reducing the cost of doing business in the country to help local businesses grow.
The demands were made at a pre-budget event titled “Budget a Prottyasha 2022-23” jointly organized by FBCCI and RTV at Hotel Sonargaon in the capital on Wednesday.
Speaking at the occasion, Commerce Minister Tipu Munshi said that Bangladesh was a prodigy in agricultural production.
“We have to sustain our success in agriculture,” he also said.
The minister also said that the upcoming budget will be challenging as the country will be losing several facilities after attaining LDC graduation in 2026.
Presiding over the pre-budget function, FBCCI president Md Jashim Uddin said that all businesses and consumers are worried due to the Covid-19 pandemic and Ukraine–Russia conflict, as prices of essentials keep hiking due to these crises.
Hence, the upcoming budget should take everyone into account, he suggested.
Jashim also sought the intervention of the government in lowering the cost of doing business and extended policy support in the upcoming national budget.
DCCI president Rizwan Rahman stressed the need to further reduce corporate taxes to remain competitive in the post-LDC graduation era, proposing to reduce corporate tax rate by 2.5% for both listed and non-listed companies in the next budget.
He also emphasized the importance of increasing investment, employment generation, private sector participation in the industry development, widening tax and vat net, export diversification, infrastructure development, and the prioritization of a business-friendly environment.
In response to the demands from the businessmen, Agriculture Minister Md Abdur Razzaque assured that the next budget will be an inclusive budget that will take both rich and poor demographics into account.
“We will emphasize agriculture and industry sectors to continue economic growth. The government is farmer-friendly, so we are providing a 70% subsidy on agro machinery import,” the agriculture minister said.
He also said that the mechanization of agriculture should be emphasized in the budget as Bangladesh has done very well in agriculture from the point of view of land size and population pressure.
However, Ahsan H Mansur, executive director of Policy Research Institute of Bangladesh (PRI), pointed out that the amount of subsidy in the budget for agriculture will increase a lot this year and can exceed Tk30,000 crore, while the problem is that there was not much opportunity to reduce from there.
“Our production has increased a lot. We may not be 100% self-sufficient in food, but about 92-94% is produced within the country and only a small portion is imported. If we do not subsidize that would be disrupted,” Ahsan said.
The senior economist suggested that there is an opportunity that the Agriculture Ministry can consider- going solar for the need for electricity, which will be affordable and in line with the government's green growth strategy.
According to Mansur, only 1-3% of agriculture has been limited to mechanization.
“If we can go solar on a large scale, we can increase productivity. Both the farmer and the agricultural economy will benefit," he added.
Executive chairman of BIDA Sirazul Islam, BSEC chairman Prof Shibli Rubayat-Ul-Islam, BKMEA executive president Mohammad Hatem, BGMEA vice president Shaidullah Azim, MCCI Dhaka president Saiful Islam, BCI president Anwar-ul Alam Chowdhury (Parvez), BTMA vice president Abdullah Al Noman, agriculture development activist and FBCCI Panel Advisor Shykh Seraj, CPD executive director Fahmida Khatun, and SME Foundation chairperson Md Masudur Rahman also spoke at the event as panel discussants.