Experts term proposed budget ‘unrealistic and fictional’
Experts at a post-budget meeting on Wednesday, termed the proposed budget ‘most unrealistic’ and ‘fictional’.
They said that with such unattainable revenue estimate, the expenditure plan cannot be executed and thus the projected GDP growth will be impossible to achieve.
They also apprehended that the high borrowing target from the banking system would cause severe damage to the private investment due to the decline in the credit flow to the private sector.
They suggested enhancing the penalty to 15 per cent from the proposed 10 per cent for legalising black money.
American Chambers of Commerce, Bangladesh (Amcham) organised the virtual meeting.
Planning Minister MA Mannan, who was the chief guest in the meeting, also admitted that there would be a big challenge ahead of the government in terms of attaining the budgetary goals.
He pointed out that much of the targets were set with expectations that the Covid pandemic would not last long, remittance and exports would rebound.
He also hoped that the government can seek fund from international donors like the World Bank or IMF as budget support in the wake of revenue shortfall.
Responding to a question he said that though there would be no fund shortage in regards to the improvement of the health sector, actual problem lies in implementation capacity.
Former adviser to the caretaker government AB Mirza Azizul Islam said that the GDP growth target of 8.2 per cent is not achievable.
‘There will be lower revenue and higher deficit and government has to borrow from the banking sector to meet the deficit which would ultimately harm lending to private sector,” he added.
He said that the priorities in the proposed budget are set properly but the budget needs specific allocation plan to meet those priorities.
The scope of curtailing the non-ADP expenditure is very narrow as it comprises public sector salaries, allowances and interest payments.
Dr Ahsan H Mansur, executive director of the Policy research Institute, termed the budget as the most unrealistic one saying that in many ways it is fictional.
“It seems that budgetary targets like revenue and expenditure is created with an artificial illusion as given the present pandemic situation the revenue target proposed in the budget is totally unattainable,” Dr Mansur said.
As the revenue will be much lower, the expenditure plan proposed in the budget will not be implemented resulting in lower GDP growth, he cautioned.
“We need to come out of traditional budget making process. We need tax reform to mobilise, sound tax administration to achieve more revenue” he noted.
Former President of AmCham and DCCI, Aftabul Islam said that the government should be lauded for allocating TK 20 thousand crore subsidised loan for the SME sector.
But the mentality of the banks and financial institutions needs to be changed for the disbursement of the money as they treat SME as risky sector for lending money.
Former Chairman of NBR Mosharraf Hossain Bhuiyan noted that the automation of the customs would ease cost of business.
He informed that the new Customs Act would be passed by the parliament very soon.
It is being scrutinised by the parliamentary standing committee on finance now, he mentioned.
He said that the tax on private cars and mobile phone should not be raised rather he suggested the rise in the income tax rate for the high income group.
AmCham President Syed Ershad Ahmed said that the proposed provision for legalising undisclosed money is unethical.
But he suggested that if the government want to keep it the penalty should be raised from the proposed 10 per cent to 15 per cent.
Other participants stressed the need for congenial environment for doing business to attract more FDI.
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