CPD said that investment promotion should be the key objective of the current government’s penultimate National Budget for FY2013 at a press briefing on Recommendations for the National Budget FY2012-13 at the CPD office on 7 May 2012. “All the necessary steps have to be taken in the next budget to expedite private investment and keep up the growth trend,” said Dr Debapriya Bhattacharya, Distinguished Fellow of the CPD.
CPD recommended that alongside government expenditure the dependence on bank borrowing should be reduced in the upcoming fiscal year in order to facilitate increased flow of credit to the private sector for investment. Government should intensify mobilising foreign resources and devise an effective mechanism to utilise the money stuck in the external aid pipeline. This would address many of its challenges in the economic front.
Commenting on Bangladesh’s ongoing energy crisis, CPD spoke against further use of quick rental power plants calling them an ‘administrative and planning failure’. The panel suggested the government to place greater emphasis on establishing medium (100-200 MW) and large (500 MW) coal base power plants as these are more energy efficient, and therefore would help reduce the burden of subsidy. CPD proposed a number of ways to broaden access to other alternative power sources. These included the concretisation of Bangladesh’s Coal Policy, cross-border hydropower trade with Bhutan and Nepal and importing gas from neighbouring Myanmar.
Given the high rate of inflation CPD suggested to raise the income tax exemption limit to Tk. 200,000 (from Tk. 180,000) for individuals, Tk. 220,000 (from Tk. 200,000) for females and Tk. 275,000 (from Tk. 250,000) for disabled persons. CPD also suggested to introduce mandatory TIN for all beneficiary owner account holders.
CPD’s proposal also included reduction of custom duty on capital machineries for domestic industries, import duty on computer parts used for academic institutions and reintroducing food rationing for workers in major industrial clusters. CPD mentioned that National Budget FY2012-13 also needed to address issues such as improvement of human rights, curbing corruption and allocation of adequate resources for infrastructural facilities.
CPD Head of Research Dr Fahmida Khatun presented the recommendations to the media.