Budget missing reform guidelines for 'Smart Bangladesh'

The proposed national budget for fiscal year 2024-25 does not contain any guideline on the many anticipated reforms for the realisation of the "Smart Bangladesh" vision, said the International Business Forum of Bangladesh (IBFB) yesterday.

"The country's economy is going through a transitional period. That's why reforms are needed for the sake of the country and businesses," said the research and advocacy platform.

At a media briefing on its premises in the capital over its analysis of the budget, the IBFB said the inflation target was set at 6.5 percent but just last month it stood at 9.89 percent.

"We see that reining in inflation to attain the target will be a huge challenge. Rising inflation must be reined in. If not, common people will suffer even more," said IBFB President Humayun Rashid.

Excessive government borrowing from the banking system was hindering the flow of credit to the private sector, which may adversely affect investment and employment, he said.

The budget deficit stands at Tk 2,56,000 crore, which is 4.6 percent of the GDP. However, it is 5.2 percent in the current fiscal year, he said.

To meet the upcoming fiscal year's deficit, the government will have to secure Tk 1,60,900 crore from internal sources. Out of this, Tk 1,37,500 crore should be availed from the banking system, he added.

To meet the budget deficit, the management units of banks also need to reduce non-performing loans, he added.

Rashid said instead of depending on the local banking system, attention can be paid to cautiously securing financing from foreign sources at the lowest possible interest rates.

Muhammad Abdul Mazid, adviser of the IBFB, said the opportunity to legalise undisclosed wealth with no questions being asked upon payment of a 15 percent tax would discourage compliant taxpayers.

It is not right to provide such an opportunity, he said.

Mazid said it is not possible to take every step necessary for the development of businesses within one year. Businesspeople should understand that too and act accordingly, he said.

Hafizur Rahman Khan, chairman of Runner Group, was present at the event.