Recommendations of Islamic Economics Research Bureau

Recommendations of Islamic Economics Research Bureau

On

National Budget FY 2008-09

1.  The Islamic Economics Research Bureau (IERB) organized a round table meeting on 14 June 2008 on the recently announced National Budget for the fiscal year 2008-09.

2.  The meeting welcomes the targeted revenue growth envisaged in the FY09 budget, and recommends strong revenue effort by the tax administration to maintain the good record of revenue collection performance of the current fiscal year in the coming fiscal as well.

3.  Efforts should be made to ensure the timely availability of external resources by undertaking the genuine reforms as required by the development partners.

4.  The meeting notes with concern that a growing recourse to bank borrowing has been a regular feature of the government’s finances over the years. The meeting strongly believes that in the interest of maintaining macro-economic stability and for the purpose of ensuring unhindered availability of credit to the private sector the government should set and ensure a targeted amount of credit to the private sector and at the same time reduce its dependence on excessive bank borrowing in the coming fiscal.

5.  In view of the deterioration in the purchasing power of the tax payers due to inflation and resultant high cost of living the meeting recommends that the tax exemption ceiling be raised from the existing Tk. 1,50,000/- to Tk. 2,00,000/-.

6.  The meeting hails the proposed reduction of corporate tax by 2.5% and recommends that the facility be extended to the financial sector as well.

7.  The provision of safety-net programmes in the proposed budget is highly welcome. However, the meeting feels that mere allocation for the purpose is not sufficient. The government take appropriate initiatives to ensure that the programmes are implemented properly.

8.  In view of the chronic unemployment problem in the country the meeting considers the proposed Employment programme in the budget a step in the right direction. However, in view of its enormity in the monga meas it recommends that the allocation for the purpose be increased from Tk. 20 billion to Tk. 30 billion.

9.  The meeting considers the proposed allocation in the power and energy sector as highly inadequate and urges upon the government to formulate and implement a short as well as medium term plan in the sector based on the overall energy need of the country and take immediate steps to make the country free from load shedding.

10.  While appreciating the allocation against subsidy for poor and marginal farmers in the budget the meeting urges upon the government to ensure that the subsidies reach the targeted farmers in time. It also recommends that the government should ensure timely availability of agricultural inputs and services like seed, fertilizer, insecticides, fungicides and maintenance services to the farmers at a price within their reach.

11.  The meeting appreciates the proposed underground rail in the metropolis in order to ease traffic congestion. However, it feels that the feasibility of the proposed system should carefully be examined, and its costs and benefits duly analyzed so that in future its fares are not considered too high for the passengers and it does not become a white elephant for the nation.

12.  The RTC further recommends that the authorities make appropriate measures to introduce distribution of potato along with rice/wheat amongst the VGF/VGD cardholders on the basis of a reasonable percentage.

13.  Inflation is now the number one problem of the economy. A production-oriented, market-friendly monetary policy of the Bangladesh Bank, implementation of the fiscal policy measures in the budget, and the continuation of the existing short-term measures like OMS of foodgrains at subsidized price, increasing the amount of foodgrain imports, regular monitoring of markets, and fixation of maximum retail price (MRP) for edible oil will be needed to bring inflation under control.

(Md. Sharif Hussain)

General Secretary

Islamic Economics Research Bureau (IERB)

60/E, Purana Paltan, Dhaka-1000.

Phone : 7168745

Mobile : 01817001915, 01711056287

Fax : 7168745

Email :

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