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Dhaka Tribune

Finance Minister: Next budget to focus on employment generation

  • ‘Efforts underway to overcome foreign currency reserve issue’
  • ‘AIIB to provide more financial support to Bangladesh’
Update : 11 Mar 2024, 04:44 PM

Finance Minister Abul Hassan Mahmood Ali has said the next national budget for the FY25 would put higher emphasis on employment generation while efforts to carry out reforms in different fields are needed to be continued.

"We will have to increase employment generation to a larger extent as efforts are underway to overcome the foreign currency reserve issue," he said.

The minister was talking to reporters after holding a long pre-budget meeting for the FY25 with the country's renowned economists at the State Guest House Padma on Sunday night.

He said the eminent economists present at the meeting had put forward a set of good suggestions while all of them had opined that the government was in the right direction to overcome the current economic situation.

"I have never said that there is no problem. But, we have got praises that we have been handling the situation well and so far everything is good," he said.

"Everyone knows what the underlying problems are...so they (economists) have remarked that everything is well so far, but we have to remain cautious about the problems," he added.

When asked about their specific suggestions, the finance minister said that the ongoing reform initiatives should be continued in various fields.

Replying to another question on publishing the list of loan defaulters following the suggestions of the economists, he said, "Let's see what we can do."

The minister also said the vice president of the Asian Infrastructure Investment Bank (AIIB) in a recent meeting with him, had assured that they are ready to provide more financial support to Bangladesh.

"They (AIIB) informed us that fund is ready and take it....," he said.

Emerging from the meeting, eminent economist and former central bank governor Dr Salehuddin Ahmed said the main thing of the budget should be macroeconomic stability.

He suggested raising allocations in the education and health sectors side by side, minimizing the number of such projects that take much time to get results.

The noted economist also advised ensuring strict monitoring for implementation of the budget, increasing dependency on direct tax instead of the indirect tax like VAT, ensure allocations in different sectors on priority basis, and minimize wastage.

"There should be a fine synergy between the monetary policy and the fiscal policy ... Boosting supply chain is needed as inflation is mostly supply-driven. The real sector should also be promoted," he added.

The former central bank governor opined that it is not possible to control the inflation trend with the interest rate as small businesses are often affected by this.

In this regard, Dr Salehuddin suggested making the interest rate market-based.

Distinguished fellow of the Centre for Policy Dialogue (CPD) Dr Mustafizur Rahman, said the meeting discussed various aspects of the budget for the next fiscal year as well as how to ensure further macroeconomic stability.

"We have said that it will be more convenient to implement the budget if the exchange rate and inflation can be controlled considering the current position of the economy," he added.

Executive Director of the CPD Dr Fahmida Khatun, said the main focus of the next budget should be ensuring macroeconomic stability instead of putting much focus on growth.

"In this regard, there is a need for generating more employments, increasing investments in the private sector and also the FDI," she said.

She also said there is a need for similarity between the policies and operations of the government.

The famed economist also suggested for framing a contractionary budget by reducing the allocations for expenditure and operational costs under the current circumstances, pursuing austerity and minimizing wastage, raising dependency on direct tax, ensuring diversification in economy, making more investments in Human Resources to generate more employments, making more allocations in the health and education sectors, boosting the revenue collection through putting more emphasis on automation, and thus giving a real a picture on the materialization of the suggestions on budget made by various quarters.

Dr Fahmida Khatun also demanded the publicizing the loan defaulters' lists.

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