In the proposed budget for fiscal year 2023-24 (FY24), there was no clear direction to increase and sustain the capacity of domestic industries, said the Bangladesh Chamber of Industries (BCI) in its post-budget reaction.
Anwar Ul Alam Chowdhury (Parvez), president of the chamber, said in Finance Minister AHM Mustafa Kamal's budget speech emphasized attracting domestic and foreign investment, creating employment and producing import substitute products.
However, there is no clear direction to increase and sustain domestic industrial capacity, especially for the development of micro, cottage and small-scale industries, he remarked.
He also said that the micro, cottage and small-scale industries have already dropped by around 45% due to the impact of the Covid-19 and the Russia-Ukraine war.
Moreover, revenues are mainly collected from the private sector but currently high inflation, dollar crisis, energy problems are reducing the purchasing power of the people, resulting in the loss of growth in the manufacturing industries.
Meanwhile, private sector credit growth is in a downward trend where exports are also slow and remittances are not growing at the expected rate.
To sustain the country's economy, attention should be paid to import substitution industries and how to bring back the capacity of factories to grow, but there is no direction in the proposed budget of FY24, Parvez also said.
He also said that the budget should focus not only on the conditions of the IMF, but also on how the country's economy will move forward.
“We must now focus more on restoring and sustaining the capacity of local industries, import substitution industries and retaining employment,” he added.
BCI welcomed the decision to raise the tax-free income limit of the individual category Tk3.5 lakh.
However, they urged to withdraw the proposal of imposing a minimum income tax of Tk2,000 on non-taxable TIN holders as it may create a tax burden on the lower income group.
They also said that due to fuel shortage in the private sector, rise in electricity and gas prices and lack of uninterrupted supply, industrial plants are operating at 50%-60% production capacity.
Moreover, due to Bangladesh Bank's contraction policy, in the last 10 months, industries have opened 56% less capital equipment, 31.3% intermediate raw materials and 31.5% less raw material loans.
In this regard, Bangladesh Bank should not hinder the import of industrial raw materials and capital equipment under any circumstances and the government should ensure uninterrupted power and energy supply at low cost.
