The New Nation - Internet Edition

Staff Reporter

The national budget for the fiscal 2008-09 is populist and expansionary from the revenue expenditure point of view, said Centre for Policy Dialogue (CPD) in its post budget reaction yesterday.

It also said that political stability, smooth transition of power to an elected democratic Government and high efficiency of state machinery are important for the implementation of the budget.

"We welcome the present budget and it is not ambitious one in comparison with the last fiscal," Prof Mustafizur Rahman, Executive Director of CPD said at a press briefing at BRAC Inn in the city.

He said the budget of the current fiscal is traditional in term of revenue earnings and development expenditure is conservative.

He said achieving GDP 6.5 per cent could be possible if the Annual Development Programme (ADP) in the current fiscal is implemented as the nation has achieved 6.2 per cent GDP in the last fiscal even after consecutive floods and Sidr.

He also said maintaining prices of essentials within tolerable level, creating employment, widening social safety net programme, reducing regional disparity and ensuring food security are the main priorities of the current fiscal budget.

He, however, said the development of the country's power sector is vital, otherwise, attracting more investment and ensuring uninterrupted economic growth could not be possible.

Executive Director of CPD that mobilising foreign resources will be a major challenge for the upcoming fiscal and proper care should be taken to avoid ' crowding out' effect on the private sector credit, threatened by high Government borrowing.

He also said that high budget deficit should not be continued for too many years since this will lead to increased expenditure on debt servicing.

Budget deficit has been estimated at Tk 30,580 crore (5 per cent of the GDP) for FY 09 ( Tk 25,546) crore in revised budget of FY 08 ( 4.8 per cent of GDP).

He said the current fiscal would be a challenging year due to implementation of election road map as a large part of the money would have to be spent by the elected Government to ensure development management in line with Poverty Reduction Strategy-ii objectives.

Maintaining macroeconomic stability and economic growth, containing inflation and narrowing fiscal deficit and reducing poverty will also be a big challenge for the Government for the current fiscal.

Re-fixation of tariff slabs, focus on SME and agriculture, widening of VAT net ,continuation of administrative reforms, protection of import substituting industries and encouragement of local industries are the key fiscal measurers for FY09.

The subsidy on diesel, octane and petrol need to be readjusted in line with the international market price. However, farmers and poor people should be provided subsidised diesel and kerosene, he added.

"The estimated 8.0 trillion cubic feet (tcf) of current gas reserve will not be able to meet the national demand after the year of 2015," CPD Executive Director noted and suggested to finalise the National Coal Policy. Prof Mustafizur Rahman said without the growth of Small and Medium Enterprises (SME's) more employment could not be created.

He also said higher revenue collection, excellent exports performance, higher remittance inflow, comfortable foreign reserve, bumper Boro production and efficient handling of post flood and Sidr management were the positive developments in the last fiscal.

The reports also mentioned of producing at least 32 million tons of rice for the next fiscal as food security. Increased budgetary support and input supply required for higher food production in FY2008-09. Reinvestment of profit and income from Foreign Direct Investment (FDI) by foreign companies need to be encouraged.

The CPD suggested raising the efficiency of implementation of Annual Development Programme (ADP) rather than reducing the size.

Uttam Kumar Deb, Anisatul Fatema Yousuf ,Khondaker Golam Moazzem and Fahmida Khatun among others, attended, the programme.