The New Nation - Internet Edition

UNB, Dhaka

Economists yesterday recommended the government to raise income tax exemption limit, strengthen social protection in the new budget and take more diplomatic initiatives to ensure rice import to contain its spiraling prices.

At a pre-budget meeting with Finance Adviser Dr Mirza Azizul Islam at his ministry, they also suggested revisiting the subsidy as they think an unsustainable subsidy regime has emerged now.

The other recommendations included expediting ADP implementation, making ADP more realistic, giving more emphasis on agriculture and SME investments, increasing allocation for improving nutrition and setting regional targets to remove disparities. "We'll try to implement the recommendations practicably," Dr Aziz told reporters after the meeting.

Bangladesh Bank Governor Dr Salehuddin Ahmed, Finance Secretary Dr Mohammed Tareq, senior officials, former finance advisers, finance secretaries, economists and academics took part in the pre-budget discussion.

"The government should boldly face it (subsidy regime)… you (government) will have to look at the present regime, which is just too excess," Dr Aziz quoted economists to have told the meeting.

He said the international price of petroleum oil was US$ 62 per barrel when the domestic price of fuel oil was last adjusted, but the international price has now soared as high as US$ 110 per barrel. Similarly, the price of fertilizer has marked a lot of increase by now.

"Agriculture is one of our top priority sectors. We'll not do anything that could affect the sector," the Finance Adviser said, replying to a question whether revisiting subsidy could further enhance the food prices.

He added that a bit increase in fertilizer prices is unlikely to create a major problem as the price of cereals also increased to a great extent, making a high-profit margin for the producers.

The Adviser said the economists suggested increasing the income tax exemption limit from Tk 1,50,000 to Tk 2,00,000 in the next budget considering the problem being faced by the fixed income group people due to the price situation.

"You cannot do a lot in containing prices due to the international prices," he was quoted to have been told by the economists.

About Annual Development Programme (ADP), he said the economists noted that the ADP implementation has been historically much lower than the respective estimates and suggested giving proper attention to the implementation.

They suggested making a realistic ADP so it could be implemented, he added.

Replying to a question, the Adviser said he has no plan at this stage to invite political leaders to the pre-budget discussions, which he started from the port city of Chittagong on Saturday. "It'll not be appropriate for me to invite them before the political dialogue at the high levels."

In a supplementary, he said the next elected government would have two options-they will have a parliament to give a new budget and would have an opportunity to revise it, if necessary, under the proposed Fiscal Responsibility Act.

He said the Council of Advisers has already approved the proposed Act, which is awaiting promulgation as ordinance.