FBCCI president Abdul Matlub Ahmad said dependency on bank borrowing to meet budget deficit might cast a shadow on loan flow to the private sector.
“As per the proposed budget, the government will have to borrow Tk38,523 crore out of Tk86,657 crore (deficit) from the banking sector. High dependency on bank loans to meet deficit may have a negative impact on financing the private sector,” the apex trade body chief told a post-budget press conference yesterday.
“If the government fails to meet proper financing, it will hamper development activities, and that is why the government will have to strengthen monitoring on budget implementation,” Matlub Ahmad said.
The new FBCCI chief urged the government to ensure business-friendly tax collecting process to achieve the revenue target as the revenue is the prime budget source.
Criticising the 1% tax at source, he said: “In the last 25 years, the government has provided incentives to the country’s clothing industry. But it is too early to impose 1% tax at source. Please, continue the current incentives for one or two more years for the RMG sector. The RMG sector will give returns to the government.”
The budget is not textile-friendly and raising of tax at source for all export-oriented sectors is not acceptable, said Matlub Ahmad.
“The budget can be termed export unfriendly.”
“Bangladesh GDP growth is hovering around 6%. The government has set 7% growth for the FY2015-16, and to achieve the target, investment needs to be increased.”
He urged to lower bank interest rate to single digit to attract investment.
FBCCI president also urged the government to withdraw the proposed 10% value added tax on private universities, engineering institutions and medical colleges as it would increase educational expenses and hinder expansion of education facilities.
Matlub Ahmad said the government should not impose Vat on essentials during the month of Ramadan to keep the prices at a tolerable level.
“For the first time, the government has accepted the highest number of proposals from business people. But we will request the government to meet the unmet demands,” he said, adding that “We are very hopeful that the government will respond positively.” l
