The New Nation - Internet Edition

Staff Reporter

Finance Adviser Dr Mirza Azizul Islam yesterday said the Government will continue to intervene in the hardship of people through social safety net programmes which emerged due to the soaring price of essential commodities.

"We've no other option at this moment without strengthening and widening the ongoing social safety net programmes," he told newsmen, after a pre-budget meeting with editors of print and electronic media at the Finance Ministry.

Dr Aziz said all the quarters he has so far met in pre-budget discussions, including the economists, former finance advisers and finance secretaries, were of the opinion that something has to be done as the family budget is failing to buy food.

"What could be that 'something'? Nobody came up with any concrete suggestion," he said. Replying to a question, he said feeding 1.5 crore people with 1-1.5 kg rice free of cost is not possible. "One has to think of the resources required to feed them free."

Dr Aziz said the present subsidy regime needs to be adjusted to some extent to make it sustainable. "We've not yet decided to reduce or increase the subsidy," he said, replying to a question. The Finance Adviser said there is a wrong perception that the government could have utilised a little part of the high reserve of foreign exchange to help bring down the food prices.

"It's not a government property and, at the same time, it's not too high a reserve considering the absolute requirement of keeping a reserve equivalent to three months of import payments," he said.

He added that the reserve that rose just over US$ 6 billion was not too big in view of the increased bills for food import. Until March 15 of the current fiscal year, rice import stood at 30 lakh tonnes, which is 6 lakh tonnes higher than the total import of 24 lakh tonnes in the previous fiscal year.

"Financing for the increased import would have been difficult unless we had that reserve position," said the Adviser.

Dr Aziz said the media representatives asked whether the Government would be able to maintain the present growth of revenue collection in the future, and whether the Government could reduce unproductive expenditure.

They also stressed the need for accelerating ADP implementation. They recommended giving more emphasis on the agriculture sector in view of the high food prices, and considering more incentives for agro-based industries like jute and sugar mills.

About increased incentives to agro-based industries, the Adviser told the meeting that the industries would have to increase their productivity and efficiency.

He said the main incentive for RMG industry is duty-free import of raw materials under bonded facility. But agro-based industries have no such scope as they use local raw materials.

About ADP implementation, he apprised the editors that the government's attention was diverted from the development works due to floods and later the cyclone Sidr.