International Business Forum of Bangladesh (IBFB) said without establishing good governance and complying with the due diligence, the implementation of the new budget will not be possible.
"That's why, financial discipline in the banking sector should be restored in order to overcome the challenges of budget implementation, the IBFB said in its post-budget press conference held recently at National Press Club in Dhaka.
The rising non-performing loans are fuelling the cost of doing business and affecting the overall economy, and it is the main bottleneck to bringing down the interest rate to a single digit, it said.
However, the IBFB thanked the finance minister for the six proposals to reform the banking sector and to slash the interest rate.
“The government needs to go for a massive reform in the banking sector to help the economy to continue to grow,” said Humayun Rashid, president of the IBFB.
The increasing pressure for the budget’s deficit financing is hurting investment in the private sector, he said. He suggested the government mobilise external sources to meet the needs for deficit financing.
The private sector is still dependent on bank borrowing as the capital market is yet to become a dependable source of fund for the investors, Rashid said.
The IBFB differed with the government’s proposal of giving the scope for whitening of the black money by investing in flat purchase and economic zones.
Rather, the government should encourage people to invest in Rangpur and Rajshahi regions to help reduce economic disparity and create employment for the poor, the platform said.
The high corporate tax reduces the investment capacity of businesses and leaves a negative impact on the economy, it said.
“So, the government should give tax benefit to the companies enlisted in the stock market,” Rashid said.
About the size of the budget, he said there was scope to increase it to strengthen the foundation of the economy, boost job generation and attract foreign direct investment.
However, Rashid said the revenue expenditure is increasing every year in comparison to the development expenditure. The IBFB said the share of the development expenditure should be 45 percent of the total outlay of the budget.
The Tk 100 crore allocation for young entrepreneurs and startups will create new entrepreneurs and help generate new business ideas, Rashid said.
The forum, however, was critical of the proposal to impose 5 percent advance tax along with other duties on importers, as it will hike the price of products and create pressure on the consumers, he said. “Even, multiple slabs of value-added tax may also increase the price of products.”
Hafizur Rahman Khan, former president of IBFB and also chairman of Runner Group, and Muhammad Abdul Mazid, chairman of the finance committee of the IBFB, also spoke.
-rmc//