CPD for duty adjustments to manage imported inflation

The government should go for import duty adjustment and improvement of market management to address the adverse impacts of imported inflation when prices of essentials are spiraling, said the Centre for Policy Dialogue (CPD) at a discussion on national budget for 2022-2023.
The think tank in its Independent Review of Bangladesh's Development (IRBD) report, titled "State         of the Bangladesh Economy in FY21-22" also recommended the use of strategic food stocks, an open market system, and strengthening of social safety net programs - particularly programs for food distribution and cash transfer.
The CPD Executive Director Dr Fahmida Khatun said this in her presentation at a press briefing in the city on Sunday.
"Inflationary pressure will hamper a sustainable and inclusive recovery of the economy since the real purchasing power of many people will decline, causing further inequality," she said, adding Bangladesh's economy is under pressure from new challenges caused by both external and domestic factors.
Coordination between monetary policy and fiscal policy is needed, particularly in the upcoming FY 2022-23 budget to keep the commodity prices under control, the CPD said."Policymakers will have to come out of growth obsession and focus on the quality of growth in terms of distribution of the benefits of growth more equally," it added.
The CPD also recommended the National Board of Revenue (NBR) should immediately consider removing the advance income tax (AIT), advance tax (AT), and regulatory duty (RD) on all imported essential food items and that the role of the Bangladesh Competition Commission needs need to be further strengthened, particularly in case of essential consumer goods market.
"Private sector corporations should consider a higher salary increment in 2022, given that a 5 percent increment of salary in the face of double-digit price hikes is compelling workers to seriously compromise their standard of living," CPD said while recommending increasing minimum wages in all industries so that workers can at least afford their basic food.
Moreover, it said sale of essential commodities through OMS should be increased and their distribution  must be managed effectively without any corruption.   
"The government should be prepared for maintain adequate food stock not only through better agricultural production, but also through importing food," the report said adding that there is a need for actual demand estimation of rice and other food items in the country.
Speakers said inflationary pressure will hamper a sustainable and inclusive pandemic recovery, since the real purchasing power of many people will decline, causing further inequality.
Among others its former executive director and a senior fellow Professor Mustafizur Rahman and other senior economists were present in the press briefing.