The government is determined to achieve 7.3% GDP growth this fiscal year taking “coordinated efforts,” said officials quoting finance minister.
The decision came up after discussing major economic indicators in the fiscal coordination council meeting yesterday.
According to meeting sources, Finance Minister AMA Muhith told the officials to take necessary steps to achieve the targeted economic growth.
The meeting also recommended reducing the profit rate of savings instruments with a cap on the bank’s lending rate, apparently in a strategy to stimulate the country’s private investment.
At present, profit rate of savings instruments is around 11-12% in different savings schemes.
“In response to declines in export, remittance and revenue, we should take a challenge to see the economy grow at above 7% in the 2014-15 fiscal,” the officials quoted finance minister.
Finance Minister AMA Muhith presided over the two important meetings.
Commerce Minister Tofail Ahmed, finance, commerce and Economic Relations Division secretaries, NBR chairman and Bangladesh Bank governor also attended the meetings.
The sources said the meeting asked the central bank governor to reduce the spread between lending and deposit rate.
But the governor said he cannot do that in a free-market economy, according to sources.
At present, the bank lending and deposit rate spread is more than 10% as commercial banks are taking deposits at 6-8% rate, but lending at 16%.
During first quarter of the fiscal, the total revenue earning of the government was Tk34,785 crore, of which, NBR collected Tk27,151 crore.
The growth was 15.87% compared to 17% during the same period last fiscal.
In the meeting, finance minister asked the NBR chairman to take necessary steps to increase the non-NBR revenue, the sources said.
The overall export earnings growth in first quarter declined to 0.88% from 21.24% one year ago.
The budget was implemented at 6.85% rate in the period while the government’s bank borrowing amounted to Tk9,203 crore.
The government took loans of Tk6,821 crore from the saving instruments in the period despite it borrowed a huge amount from the banking sector.
ADP implementation rate was also slow - only 9% compared to 11% in the same quarter last year.
However, according to an official who was also present at the meeting said the government’s bank borrowing would decline if the revenue earning increased in the next quarters.
Another official said Commerce Minister Tofail Ahmed told the meeting that the “low import tax” was responsible for gold smuggling in the country.
He said the government of India has imposed a tax of Tk6,000 on import of 100 grams of gold.
But Bangladesh has currently put a tax of Tk3000 on import of 100 grams gold, he cited in the meeting.
