Finance Minister AMA Muhith has admitted that the amount of ‘black money’ in the economy is rising, adding that a study will be done to assess its exact proportion.
He said this on Monday night while talking to reporters after a pre-budget discussion with some of the country’s top economists.
The minister said: “Black economy exists in the country and its size is growing. We’ll launch a study on it in the second year of our government.”
The results of the study might come in the third year of the government, he said.
In Bangladesh, ‘black money’ refers to funds generated by evading income and other taxes.
Muhith said a similar study had been conducted five years back.
Referring to that study, he said ‘black money’ accounted for 40-80 percent of Bangladesh’s economy.
The finance minister said that the government is finding a way to best utilise the money sent by expatriate Bangladeshis.
“We will build the Padma bridge ourselves. Expenditure will shoot up, if we issue bonds to raise the funds. In this case, the remittance sent by expatriates might be used. Economists have also advised us to do that.
“A system has to be worked out on how to use the remittances for building Padma bridge, it will involve creating a Fund and we are working on that,” said Muhith.
According to Bangladesh Bank statistics, remittance inflow touched $14.46 billion in FY13 . That is more than 10 percent of the national income.
In the nine months (Jul to Mar) of the current 2013-14 fiscal, remittances worth $10.48 billion have flowed in. The forex reserve now stands at $ 19.50 billion as of Monday (Apr 7). That’s an all-time record.
“Everybody knows that capital is being siphoned out (invested abroad). The biggest proof of that is that savings are more than investments. Currently, investment stands at 26 percent of the GDP (Gross Domestic Product) while savings account for 29 percent,” said Muhith.
“We have taken a lot of initiatives to boost investment and it is our priority to raise it further.”
Replying a query from reporters, the finance minister said that action would surely be taken against the officials of the state-owned Basic bank, who were involved in graft.
“Wait and see, we are taking action.”
Muhith said economists have recommended scrapping the mandatory requirement of holding 2 percent shareholding for an individual to become a listed company’s director.
“I have told them it was done to stabilise the capital market. Now the market is stable. The requirement would be gradually withered down after considering the overall scenario.”
The upcoming budget will focus on poverty alleviation, said Muhith adding: “The reach of the social safety net would be expanded. The deprived population including the sweepers will be covered under the scheme this time.
“Budget allocation will be increased to raise the quality of education.”
Muhith will present his eighth budget, the first for the present government installed after the controversial Jan 5 polls.
In the run up to the budget , the finance minister usually holds pre-budget discussions with people from all walks of life. On Monday, he discussed the budget with top economists of the country.
