Six CPD recommendations for implementing budget
The Centre for policy Dialogue (CPD) has put forward six recommendations to implement the national budget for fiscal year 2017-18.
The recommendations are banking sector reforms, maintaining quality in implementing the Annual Development Programme (ADP), formation of a commission for fixing prices of agricultural commodities, Active parliamentary standing committees. End to high cost borrowings and improving the overall budgetary earning-expenditure, which include maintaining the existing trend of revenue collection.
The CPD placed the recommendations at a press briefing on "National Budget FY2017-18: Post-Approval Observations" at Brac Centre Inn in the capital on Monday.
Dr Fahmida Khatun, Executive director of the CPD, Distinguished Fellow Dr Debapriya Bhattacharya, Dr Mustafizur Rahman, additional research director, Khondaker Golam Moazzem, research fellow Tawfiqul Islam Khan and other senior officials were present in the press briefing.
Debapriya Bhattacharya said that revenue collection in the current fiscal year 2017-18 could suffer a shortfall due to non-enforcement of the Value Added Tax and Supplementary Duty Act, 2012 and suggested the government to focus on direct tax and non-NBR revenue sources to offset this deficit.
"The shortfall in revenue collection could be between Tk 43,000 crore and Tk 55,000 crore in FY18," said CPD's distinguished fellow Dr Debapriya Bhattacharya.
He said reduction in one percent duty at import level will not have any impact on revenue earnings. Supplementary duty could boost earnings but revenue earnings will fall because of changes in imposition of VAT in service sector, he added.
Bhattacharya said the Value Added Tax and Supplementary Duty Act, 2012 could not be enforced for three reasons. Firstly, the National Board of Revenue (NBR) had lacking in technical preparation and for this reason it was not possible to calculate real impact of VAT. Secondly, coordination was not created among the people and institutions involved in implementation of the VAT law. Thirdly, what social impact the VAT law will create on the income-expenditure of the consumers was not realized.
He suggested preparing a post-budget work-plan based on three specific targets-maintaining the existing macroeconomic stability because macro economy will face pressure if any imbalance between income and expenditure, increasing private sector investments and focusing on public expenditures that create jobs.
CPD also come up with six proposals for improving the overall budgetary earning-expenditure, which include maintaining the existing trend of revenue collection, becoming more conscious in managing non-development expenditures, reconsidering the priorities of development expenditures, refraining from high cost borrowings, handling the negative pressures in respect of foreign loans and taking forward the reform programmes.
Responding to a question, Bhattacharya stressed the need for constitution of a reform commission urgently to ensure good governance in the banking sector. He also suggested the judicious use of the budget allocation for the capital markets.