Targets in proposed budget for FY19 achievable: Muhith
DHAKA – Terming the proposed national budget for the next fiscal year (FY19) as implementable, Finance Minister Abul Maal Abdul Muhith today said that whatever targets they have set in the proposed budget would be achievable.
“Whenever we place a budget, then we definitely place it after a thorough thought that it will be implementable. This budget will be implementable,” he said replying to a question at a crowded post budget press conference held at the Osmani Memorial Auditorium in the city this afternoon.
Earlier on Thursday, the veteran minister placed a Taka 4,64,573 crore budget at Jatiya Sangsad for the next fiscal year setting a GDP growth target of 7.8 percent while containing the inflation rate at 5.6 percent.
Agriculture Minister Begum Matia Chowdhury, Planning Minister AHM Mustafa Kamal, Information Minister Hasanul Haq Inu, PM’s Economic Affairs Adviser Dr Moshiur Rahman, PM’s Energy Adviser Dr Taqfiq E Elahi Chowdhury, Bangladesh Bank Governor Fazle Kabir,
NBR Chairman Md Mosharraf Hossain Bhuiyan, GED Member of the Planning Commission Dr Shamsul Alam, Finance Division Secretary Mohammad Muslim Chowdhury, ERD Secretary Kazi Shofiqul Azam spoke at the press conference while State Minister for Finance and Planning MA Mannan was present on the occasion.
The finance minister said shortfall while implementing the budget happens every year and this time the tendency of having shortfall has witnessed a downtrend.
“I hope that the shortfall in budget will further reduce in the next year ….so, whatever targets we have set would be achievable,”
Replying to another question, Muhith said that the interest rates on various savings certificates are not permanent and those are reviewed in every two to three years.
He said this time there has been a delay in this regard adding that a meeting is likely to be held in the next month to review the interest rates on various savings tools.
Asked about the slashing of the corporate tax rate by 2.5 percent, Muhith said that 40 percent corporate tax rate is very rare in the world adding that this time the corporate tax rate has been reduced in a very planned way as this was done not all on a sudden, even the matter was discussed with the prime minister.
The finance minister termed his each and every budget as ‘election budget’ saying that being an important member of the ruling party, he has to deliver such budget which is being liked by the countrymen. “So, this budget is not for the election year, rather like other years,”
The minister also claimed that he has been able to keep up the promise of not imposing any new tax in the proposed budget.
Muhith, however, expressed his serious objection about the reports of some media outlets that this budget is bogus ‘Bhua’. “What is the meaning of ‘Bhua’? How come a budget can be bogus? No one, except those who are fools and have zero patriotism, can term a budget bogus.”
Asked whether there is anything for the government servants in the new budget, Muhith said no other governments in the past have looked into the interest of the public servants, like the way the Awami League government has looked.
The minister also termed the statement that poverty is not declining in Bangladesh as a ‘simple statement of falsehood’ saying that the poverty rate in the country has now come down at 22.4 percent which was 30.5 percent seven years back.
On the other hand, the extreme poverty rate has now come down at 11 percent which was 18 percent a few years back.
On the Rohingya issue, Muhith told a questioner that whatever expenditure that the government has made so far for the forcibly displaced Rohingyas in Bangladesh in the current year has come from international aid.
Mentioning that Taka 400 crore has already been earmarked for the Rohingyas in the proposed budget, he said that this amount would not be required fully hoping to get sufficient amount of international aid this year too.
The finance minister said the World Bank and the ADB have also assured the government of considering grant allocations for the Rohingya people.
About the reforms in the banking sector, he said the Banking Commission would not be there right at the moment as this matter would be sent forward to the new government which would assume office after the next general election.
Asked about the qualitative change in the activities of the present government over the last 10 years, Muhith said, “After independence, Bangladesh was regarded as a country of poor, needy and destitute. But, the situation is totally different now as Bangladesh is now enough a prosperous country where people live in peace even in the villages……..the word ‘Monga’ has been driven out of the country,”
Talking about the debt burden of the country, he said the current overall debt of $31 billion includes $12.5 billion for Rooppur Nuclear Power Plant project and this loan for the nuke plant would be taken in phases till 2024.
“So, excluding that amount, the country’s overall debt stands around $20 billion which is very much nominal for a country like Bangladesh. We are one of the lowest debtors in the world,” Muhith said adding that Bangladesh is also a rare country which has an impressive loan repayment record.
When asked whether the election year would hamper the budget implementation, he said the ‘wind of election’ (Nirbachoni Hawa) is yet to appear although this is the month of June. “So, this is a good news for the country. …………it seems to me that the record of budget implementation would not be bad in this election year which is a good news,”
The finance minister also expressed his firm resolve that like the previous years, the budget deficit would remain within 5 percent of the GDP this time (FY19) as this might reach at best 4.9 percent of GDP.
About the proposed GDP growth rate of 7.8 percent in the next fiscal year, Muhith was confident of achieving that target saying that Bangladesh was able to attain around 7 percent growth rate for the last four years.
Muhith said Bangladesh has set a record of higher growth for a consistent period with such small level of investment and low level of tax collection through improved utilization strategy of its resources.
He also opined that decentralization of power at the local government level is needed to reach the country at a higher growth trajectory. “The economic performance of our people is very good and for this we are getting good results despite making insufficient investment,”
NBR Chairman Md Mossarraf Hossain Bhuiyan clarified that no VAT is imposed in the proposed budget on online business or e-commerce while a process has been started to impose VAT on virtual social media business like on YouTube and Facebook.
ERD Secretary Kazi Shofiqul Azam informed that the overall debt of the country is now around $31 billion while the per capital debt is $198. He also informed that Bangladesh is going to witnesses a record $6 billion foreign aid disbursement in the outgoing fiscal year.
Planning Commission member Dr Shamsul Alam said the debt to GDP ratio of the country is still less in comparison to Japan which is 200 percent while with Singapore which is 117 percent.