But the business people and economist have observed that without improvement of ease of doing business and establishing good governance, the proposed budget will not able to attract investment
The proposed budget for the fiscal year 2019-20 will not attract investments and generate employment unless ease of doing business index is improved and good governance is brought to the ailing banking sector, economists and business leader have said in their immediate reaction to the proposed budget.
Finance Minister AHM Mustafa Kamal on Thursday announced his maiden budget of Tk5,23,190 crore for the FY20 in parliament. In the budget the government projected 8.2% GDP for the FY20 and vowed to create employment.
But the business people and economist have observed that without improvement of ease of doing business and establishing good governance, the proposed budget will not able to attract investment.
“If the investment climate is not improved and corporate tax rate is reduced further, private sector investment in manufacturing sector will not increase,” says Dhaka Chamber of Commerce and Industry President Osama Taseer.
"A 8.2% GDP target is quite achievable but to get benefit out of this we have to create employment generation and attract local and foreign investments. It would be very tough to attain the target of employment set by the government, if the private sector investment do not increase," the business leader thinks.
He calls for operation of one stop service under BIDA in 64 Districts in the country with the assistance of private sector.
“In attracting investment for both foreign and domestic, ease of doing business is a key element, but in the proposed budget we did not see any statement on improving the index of doing businesses,” Policy Research Institute (PRI) executive director Ahsan H Mansur tells Dhaka Tribune.
Moreover, there is concern over the growing non-performing loans, which is squeezing cash flow in the market for investment, he says, adding that though the government has proposed reforms for the sector, good governance is another issue in the sector.
“Beyond the mega-project, there is no direction about improving the business climate. On the other hand, though there is reforms proposal in the banking sector but it does not seem that the NPL will come under control,” former caretaker government AB Mirza Azizul Islam tells Dhaka Tribune in his reaction.
As a result, he argues, fund flow in money market will not increase, which is need for the employment generation. He also urges the government to implement the initiative taken to bring discipline the banking sector.
There is also lack of clear direction on the employment generation of three crore by 2030.
“In the budget, the government pledges that it will create three core jobs by 2030 but there is no specific framework how it would create jobs and in which area,” CPD’s distinguished fellow Dr Debapriya Bhattacharya said in an impromptu reaction.
"Our finance minister tried to bring newness but the reality has not been reflected in the budget," he said.
“In the proposed budget, the government has proposed to keep the corporate and individual tax rate unchanged. But to attract investment, corporate tax rate should be reduced,” Anwarul Alam Chowdhury, president of Bangladesh Chamber of Industries, said.
So for expediting the country's economic development, the government should reconsider it as there was challenges ahead in attracting investment and creating employment, he said.
However, the economists and business leader appreciated the government decision of allocating Tk100 crore for the training and employment of specific group of people and eliminate unemployment by 2030 by generating employment for 3 crore people
“It is imperative that the overall business environment of the country is improved significantly which lead to the much-needed acceleration of private sector investment,” said Selim Raihan, Executive Director, SANEM.
Given the current practice of slow progress in implementation and costly ventures, speedy and cost-effective implementation of the mega-projects, SEZs and other development projects under the ADP was very important, said Rahihan.
"We haven't seen in the proposed budget how things are going to be different in the coming days," he added.