The New Nation - Internet Edition

UNB, Dhaka

The country's leading economists and researchers yesterday gave the government the green signal to go ahead with its plan to widen budget deficit necessary for financing increased expenditures due to the present price situation.

"Having a deficit for one or two years by an interim government does not matter in this situation," Prof Wahiduddin Mahmud told a seminar on national budget at the Bangladesh Institute of Development Studies (BIDS).

BIDS researchers presented seven papers at the seminar titled 'National Budget 2008-09: Challenges and Response' in presence Finance Adviser Dr Mirza Azizul Islam.

Regulatory Reforms Commission chairman Dr Akbar Ali Khan and Brac executive director Dr Mahabub Hossain were present as designated discussants at the seminar moderated by BIDS director general Dr Shahabuddin Ahmed.

Economists, researchers, academics and business leaders were also present.

Prof Mahmud cautioned about keeping enough space for the private sector credit to create opportunities for employment. "The arithmetic is difficult, look for tradeoffs."

He also recommended supporting the agriculture sector in a realistic manner and go for human security measures as far as possible given the price situation. He suggested utilising the capacity of BIDS to get a quick assessment of optimum support.

The endorsement for increased deficit budget was given when Finance Adviser Dr Mirza Azizul Islam was busy preparing the national budget for the next fiscal year and the revised budget for the current fiscal year.

Earlier on many occasions, the Finance Adviser indicated that the deficit in the outgoing budget would go up, though expected that it would remain below 5 percent of GDP, to meet the increased expenditure for subsidy, social safety net programmes and inflated prices of fuel oil.