Give highest priority to energy, power in next budget: Mirza Aziz

21 May 2010, 18:00 PM

Unb, Dhaka

Putting highest priority on energy and power sector in the upcoming budget, a former finance adviser said that the government might not be able to implement the big Annual Development Programme (ADP) of around Tk 38,500 crore. In an exclusive interview with UNB at his residence at Uttara in the city, Dr Mirza Azizul Islam also identified transportation, agriculture, water resources, rural development, health, education and extension of social safety net as the other priority sectors for the budget of fiscal 2010-2011. He also demanded reactivating the Regulatory Reforms Commission. The former adviser opined that the next budget size of over Tk 130,000 crore is rational, as there is a need for more public expenditure in infrastructures including power, transportation, health, education and agriculture. “The public expenditure in Bangladesh is less than the other countries proportionate to the GDP,” he said. But about the ADP size of around Tk 38,500 crore, he said that it would not be possible to implement the ADP as the amount is too large -- a big jump from the current fiscal. Mirza Aziz said that the size of ADP in 2008-09 fiscal was Tk 25,600 crore, which was increased to Tk 30,500 crore in the current fiscal. “The ADP was later revised to Tk 28,500 crore but I doubt the ADP implementation won't cross Tk 24,000 crore in the current fiscal as the implementation rate is 48 percent till March.” He cited two reasons -- administrative weakness and lack of trust -- as the major barriers towards full implementation of the ADP. To enhance the implementation capacity, he emphasised shortening the time for issuance of work order and more seriousness among the secretaries and other subordinate officials. The former adviser also stressed increasing the monitoring capacity of the Implementation Monitoring and Evaluation Division (IMED). About the projection of GDP growth rate at 6.5 percent, he said it is not impractical, but there is a need to ensure adequate supply of gas and electricity. “It might be achievable if there is no major natural calamity.” About the government's recent move on rental power plants without tender to cope with the energy and power crisis, he said there will be fiscal burden from macro-economic point of view. “But there will be output loss if the government can't provide electricity.” He, however, viewed that an important factor could be at what price the government would buy electricity from the rental power plants. The purchase from rental power plants should be for a limited period of three years and ultimately there is a need to go for setting up permanent power plants, he said. Mirza Aziz also emphasised further improving the power management system, saying that system loss was brought down to 6 percent in December 2008 from 20 percent during 1997-98. On the government target to contain inflation at around 6.5 percent, he said the inflation might reach 7 percent but it will largely depend on world market. “It is very difficult to contain inflation with domestic measures as a portion of most of the products is import-dependent,” he added. On the current budget's special feature of Public Private Partnership (PPP), he said the provision should be there but its guidelines should be finalised as soon as possible. “The government could make project portfolio for PPP implementation with necessary guidelines mentioning the number of projects to be taken and in which sectors.” About the much-debated provision for whitening black money, the former finance adviser strongly opposed the facility citing three reasons - less effective, gives wrong signal and discriminates the honest taxpayers. About the proposed tax on capital gains, he suggested that it should prevail not only in the capital market but also in respect of other capital gains such as land and house. He, however, said if the capital gain tax is imposed for the first time the rate should remain within five percent so that the general investors would not feel pressure.