The Business Initiative Leading Development (BUILD) has made a set of suggestions, including creation of a Tk 500 billion 'National Economic Fund (NEF) by the government, to address the possible shocks due to the COVID-19 pandemic.
It also stressed a serious need to assess the potential loss of all sectors, and suggested steps to focus on the local industry that will need policy support as they are also deeply affected, in light of the current economic situation.
Welcoming the government's already announced Tk 50 billion stimulus package, the BUILD, however, said it may not be enough to meet sectoral demands if the situation continues beyond the expected timelines.
"There must be interventions targeting industries that are worst hit by the coronavirus pandemic. One key policy directive can be to extend loans at the lowest possible or zero interest rate to industries on the pre-condition to keep the workers on payroll regardless of their work," the BUILD said in a statement.
"We will need to address the critical issue of the impact on all sectors, including the MSME, which involves many business types spreading across the country," it added.
The BUILD also observed that the government should take necessary measures to reduce income tax and corporate tax rates by 5.0 per cent across all sectors.
It also suggested additional tax relief for businesses and introduction of deferred tax payments process so that business/industry and individuals do not face any financial difficulties.
"NBR should also consider postponing collection of taxes for two quarters. And no charges of any tax delays, zero demurrage charge on import and other relief needs to be given to businesses, particularly for SMEs," the BUILD said.
Safeguarding employment is an important challenge for the government, it said, adding that the government must ensure businesses don't cut jobs due to the economic downturn.
Some mechanisms need to be developed to keep jobs, it said and suggested additional 2.0 per cent tax relief to firms where there is no job loss for next one year.
The BUILD said the government should increase spending on research and development in the health sector in the budget for the coming year. Two per cent of gross revenue of a company should be allowed for investment in research and development (R&D), innovation, health costs, training, sustainable development goals (SDGs) etc, it added.
Government policies need to be devised to keep the economy with various mechanisms at its disposal, it noted.
"Today, our public borrowings have increased in recent years and liquidity crisis has its limitations within our financial systems. Therefore, with the limited resources, our policy planners need to plan accordingly to have a balanced approach," it said.
Adequate resource allocation will be needed to reallocate funds to the critical areas of the economy keeping in mind the objectives of saving lives to saving livelihoods, it added.
It is also vital to encourage PPP (public-private partnership) models in setting up hospitals and clinics in the upcoming budget with special support in allocating land, the BUILD said.
The Ministry of Industries/BIDA/Ministry of Commerce can take a task by circulating an online format for gathering information on the impact of the COVID-19 on different industries so that an assessment of loss can be prepared immediately to announce stimulus package for the survival of the sectors concerned, it added.
Due to the COVID-19 pandemic, it said, the countries across the globe are facing a risk of an outright disintegration as global supply chain is becoming quite delinked and disengaged.
Now, the global connectivity is literally handicapped, it said, adding that most of the businesses are closed due to the shutdown for an indefinite period.
