Nation to get final budget tomorrow
Abu Sazzad: The nation is going to get its final budget tomorrow for the fiscal year 2020-21, but the imposition of traditional and routine one may lead the people into more vulnerability.
Once again, the government needs to reconsider the unrealistic targets of the proposed budget to save people from the ongoing and post corona pandemic as well as to revamp business and economic activities in the country.
When the countrymen are facing to protect their existence in terms of life and economy, an unrealistic and ambitious budget is not acceptable.
However, experts recommended for issuing government bond to consider the time befitting demand of fund collection policy in line with the conception of alternative resources. Already many countries are going to issue COVID-19 bond to tackle the whole situation and in case of Bangladesh, the issuing of government bond through using capital market can be an ideal approach for prompt accumulation of fund.
Global Economist Forum (GEF) President Dr Enayet Karim underscored the need for setting realistic budgetary target that may be achievable. He laid emphasis for reconsidering the absurd targets of the proposed budget because it is contradictory with the reality.
“Many people are now facingacute food and job crisis and they are forcing to violate the social distance policy. Under such a social restriction, a realistic budget can save the whole nation from the ongoing disaster. As government decided to impose a big budget for the upcoming fiscal, the government will have to undertake specific plan to mobilise fund”, said Enayet Karim.
He recommended for issuing short, medium and long term basis government bonds to mobilse fund. In this connection, the GEF president underscored the need for involving the capital market to distribute such bonds among the Non-Resident Bangladeshi (NRB) which would help revamping the capital market as well as mitigating fund crisis in the upcoming days.
To implement the higher ADP, of course government need to collect fund from the alternative resources apart from the traditional internal and external sectors, he pointed out.
Issuing of government bond can mitigate the crisis of fund. At the same time, such money is not contradictory with the banking sector, rather it would help reducing the government borrowing dependency from the banking sector, he observed.
The GEF president also mentioned the incapability of the NBR and the banking sector to support the government for implementing higher ADP accordingly.
National Board of Revenue (NBR) is continuously failing to meet its revenue collection target and the proposed budget also sets unrealistic revenue collection target. On the other hand, the banking sector is already facing acute liquidity crisis mainly due to various financial irregularities.
Actually, banking sector is the nerve of the economy, but fresh investment to the private sector almost halted since long. Moreover, the higher borrowing target from the banking sector is foiling the financial stability of the sector. Under this circumstance, if the government undertakes such policy in the final budget, it would help resolving multifarious crisis in the financial sector and the economy of the country.
Talking on budget deficit, Enayet Karim said, the government plans to set higher borrowing target from internal and external resources to mitigate such deficit.
As the whole world is facing the Covid-19 crisis, the obtaining of adequate foreign loans from the donor agencies is quite challenging. Besides, the higher borrowing target from the internal resources especially from the banking sector is not realistic to save economy from complete recession, he added.
Dr Salehuddin Ahmed, former Bangladesh Bank Governor said, the reducing ADP size is one of the rational polices to save the nation from the coronavirus devastation.Through cutting the ADP size, the government can utilize such fund to tackle the vulnerability of the novel COVID-19 pandemic. He also suggested for disbursing the unutilized money of the ADP. Most of the money of the annual development programs is wasted which should be monitored properly.
Fund mobilization is important for the government to implement higher ADP in the most challenging year. He recommended for managing fund from alternative resources by excluding the banking sector. Considering this, issuing of government bond may be an alternative resource to collect fund that can meet the immediate demand of the people.
In this backdrop, the Finance Minister AHM Mustafa Kamal proposed Tk 5.68 trillion budget for fiscal 2020-21 in parliament amid the coronavirus crisis on June 11 last which will pass on June 30 (Tuesday).