Economists at a dialogue in Dhaka yesterday urged the major political parties of the country to ensure a political consensus, which they considered is the key to sustainable economic development.
“Political unity is needed for the economic development, economist Dr Akbar Ali Khan told the dialogue on the national budget for FY2015.
Centre for Policy Dialogue (CPD) organised the meeting, moderated by its Chairman Professor Rehman Sobhan. CPD Research Director Fahmid Khatun presented the keynote paper.
Dr Akbar said constitutional budget is no taxation without presentation. “But in Bangladesh, we hardly fine representatives of the people.”
He said now there is a question whether the parliament is elected on competitive basis, and there is a question whether any opposition is there.
“So, there would be no meaningful discussion, when there was no opposition. So for all these years, we are having budget but actually the budget procedures are not in line what it should be.”
There are also procedural flaws in the budget, Dr Akbar said, adding that the parliament is given barely three weeks time to discuss while the volume of paper is increasing.
“I do not think any member of parliament will digest it and then deliberate in the parliament. They should not follow the way the budget is presented.”
He suggested revising the sixth five year plan as the budget figures do not have any relevance with the plan.
Former Bangladesh Bank Governor said Dr. Salehuddin Ahmed said the present aggregate state of macro economy is reasonably good, but what is the major challenge I think right now is to contain inflation.
“There is a trend of going down non-food inflation but I have some doubt about the calculation. If it is up it might bring some pressure on the economy,” he said.
Public investment is going up but private investment, which is involved with job creation, remained sluggish over the years. So, for meaningful and sustainable development, we need private investment, he said.
Ahmed said the administration system should be decentralised. “For the last 40 years we have not been able to decentarlise development approach. The finance minister proposed to give district budget it does not make any sense without decertralised development. It will be controlled by the Dhaka office. It is an eye-wash.”
About revenue income, he said the target is ambitious but the challenge is to achieve the target. “But I don’t see NBR’s efficiency in tax collection has been developed yet.”
He put importance on brining reforms in the financial institutions as well as regulatory bodies, he said.
Underscoring the need for political stability for implementation of the budget, he said seemingly political stability is there but there is political uncertainty. “Public policy cannot be implemented if there is political uncertainty.”
About capital market, he said I am not comfortable for lowering tax for non-listed companies, which might discourage big companies to go public.
Companies should be less dependent on debt financing or borrowing from banks. They should go to the stock market for the big projects because banks have several limitations like single-exposure limit and other regulations.
He heavily criticized for allocation of Tk5000 crore into the state-owned banks. “This is absolutely waste of public money as the banks lost their money due to their inefficiency and corruption, and failure of internal governance and failure of whole system.”
Former FBCCI president said Mir Nasir Hossain said investment barrier have already identified. But pragmatic steps should be taken for increase of gas production and distribute it on priority basis.
Political stability as well as personal security is crucial to implement the budget and for attracting investment, he said.