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.
