Staff Reporter :
The Center for Policy Dialogue (CPD) has recommended curtailing of diesel and kerosene prices in the next budget for the benefit of lower income people.
“Prices of these fuels must be reduced. Making profit from them is not justified from social point of view as poor people use them. It will also provide some relief to investors,” said CPD Research Fellow Towfiqul Islam Khan.
He was presenting the civil society think tank’s set of recommendations for the national budget for the upcoming fiscal year 2017-18 at BRAC Centre in Dhaka on Sunday.
To overcome weaknesses in budget implementation, Towfiqul Islam put forward a five-point recommendation, including reduction in the prices of kerosene and diesel, depreciating BDT to provide exporters some relief, reduction in the interest rate of saving certificate, controlling rice prices and formation of an independent financial sector reform commission to remove weaknesses in the banking sector.
Addressing the function, CPD distinguished fellow Dr Debapriya Bhattacharya said, “We fear that the cost of production will go up in the next fiscal year… We need to control it so that the private sector will have a competitive edge.”
He said, budget implementation capacity is not satisfactory despite a big budget placed in parliament in the recent years.
Debapriya suggested to reform different policies of the government for better implementation of the national budget.
“Though tax and VAT collection has increased, the spending capacity is stand in previous position that is surprising matter for economy,” he said.
Debapriya said, it is a bureaucracy prepared budget where Members of Parliament (MPs) were absent and that is basic problem. As a result, wealth expenditure’s authority went to some lobbyist groups instead of people’s representatives, he added.
He said, reserve heist of Bangladesh Bank was not discussed in the people’s elected body like Parliament, Parliamentary Standing Committee or Cabinet.
About the budget size, Debapriya said the country’s macroeconomic base is friendly to give a bigger budget in FY 2017-18, but the quality of fiscal structure is declining gradually.
“Placing a big budget without any realistic review creates a fiscal elusion. It seems to be a big budget, but not big in true sense. There’s a big deficit between the big budget and its implementation,” he said.
“In the last three years, we noticed huge shortfall in the budgetary targets of revenue collection and expenditure, deficit and financing the deficit. The shortfall is going up gradually as the targets are not set on the basis of revised budget,” he said.
The independent body also vouched for lowering the Value Added Tax (VAT) to 12 percent instead of the uniform 15 percent.
“It is reckoned that Bangladesh’s proposed uniform VAT rate is on the high side when compared to her neighbouring low and middle-income countries in South and East Asia,” he said.
