Independent
think-tank Centre for Policy Dialogue
(CPD) sees increased flow of private investment,
resurgence of exports and qualitative
changes in ADP (Annual Development Programme)
as the premier challenges of implementing
the just-unveiled budget for the fiscal
2003-04.The civil society body also chided
the policy shift to rely on external assistance,
mainly on foreign debt in implementing
what it called a bloated size of the proposed
national budget.
"The
main challenge is the implementation
of the hefty budget. History shows that
the government even has failed to implement
the Annual Development Programme (ADP)
for long," Executive Director of
CPD Dr Debapriya Bhattachariya told
a post-budget press conference yesterday
in the city, citing the challenges before
the government in implementing this
year’s budget.
The budget relies excessively on foreign
aid flow and enhanced revenue collection,
but it remains highly obscure as to the
setbacks of ADP implementation, Bhattachariya
said. He wondered the budget speech of
the Finance Minister neglected the implementation
and quality problem of the ADP. The ADP
for FY 04 includes 174 unapproved investment
projects against which sectoral block
allocation has been provided, he said.
He, however, justified the rationale of
giving priority on physical infrastructure,
saying it was required for bringing about
inter-sectoral balance for economic growth. The
balance of payment situation continues
to remain fragile as the export is faltering
in the face of deteriorating terms of
trade, he said. He also warned that the
situation might exacerbate if the aid
inflow, currently being negotiated with
the bilateral and multilateral donors,
was not disbursed.
Weak export growth of the readymade garment
was an ominous sign, while foreign direct
investment has virtually dried up, he
said.The country netted in FDI in July-March
period of 2003 a meagre US$ 28 million,
according to available figure."The
budget has no comprehensive roadmap for
improving investment, though it provided
an array of discrete supports to agri-based
industries, textile and RMG sector",
he said.
The budget does not sketch any plan for
institutional reforms in investment supportive
or trade-supportive activities, keeping
the agreed reform plan between the government
and development partners. "If the
planned expenditures do not lead to quality
investment leading to gainful employment
generation and, desirably, productivity
growth, the inflation rate may soar further,"
he cautioned.
About tax measures, the economist said
increase of customs duty and supplementary
duty on sugar will push the prices of
the item up in local market and increase
smuggling, he apprehended. Withdrawal of
VAT exemption on use of credit card must
not be applied on the consumers, he said. In
reply to a question, Bhattachariya said
the issues of good governance and investment
promotion should have been well articulated
in the budget.
"If these issues remain non-clear,
how he (finance minister) could implement
such a big budget," he questioned. "Bangladesh
economy has to shift to higher gear to
accelerate the pro-poor growth process,"
Bhattachariya remarked. Dwelling on the
public expenditure, the economist said
jacking up the salaries of the government
service holders on ad-hoc basis would
not yield good results unless manpower
in the public administration was rationalised. The
revenue expenditure went up beyond the
target from FY 03 and posted a rise of
more than 11.5 per cent, he said, adding
that it was set to grow by nearly 14.5
per cent in FY 04.
