Friday, 14 June, 2024, Reg No- 06
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Long term business, industrial policy needed for stability, growth

Published : Tuesday, 11 June, 2024 at 12:00 AM  Count : 159

Bangladesh needs a stable long term policy for improving business and industrial production for diversifying of exports, as the frequent change of policies has been detrimental for the overall growth of the economy, said Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) President Mahbubul Alam.

He was speaking as the chief guest a discussion titled "Budget and Business Outlook" hosted by the American Chamber of Commerce in Bangladesh (AmCham Bangladesh) at a city hotel on Monday.

"We must have a long term policy for doing business and run Industry. We frequently change our policy. There should not be overnight change of levying fresh duties with an SRO (Statutory Regulatory Order) by revenue board as an example."

The event brought together key business leaders to analyze the implications of the Tk 9,97,000 crore national budget for the fiscal year 2024-25, proposed by Finance Minister AH Mahmood Ali last Thursday.

Muhammad Abdul Mazid, former chairman of the National Board of Revenue, Nihad Kabir, former president of the Metropolitan Chamber of Commerce Industry, Md. Moinul Haq, an AmCham EC member, Ashraf Ahmed, president of the Dhaka Chamber of Commerce and Industry and Reaz Islam, chief executive officer of LR Global Bangladesh Asset Management Company were the panel experts at the event, among others.  The panel discussion was moderated by Dr. M. Masrur Reaz, chairman of Policy Exchange Bangladesh.

The panel discussions focused on the budgets potential impact on various sectors, providing insights and recommendations for businesses navigating the new fiscal landscape.

Key areas of focus included sector-specific allocations, potential tax changes, and the overall economic climate envisioned by the budget.

Dr. M. Masrur Reaz presented a brief overview of the budget, noting its contractionary nature aimed at reducing government spending, which is seen as necessary in the current economic climate.

He highlighted both positive and negative aspects of the budget in regard of containing inflation and foreign exchange demands.

However, the panelists also raised criticisms, pointing to inadequate spending on critical social infrastructure sectors, a reduction in allocations for physical infrastructure including transport and energy, and overly optimistic projections for key economic indicators like inflation, GDP growth, investment, and tax revenue levels for FY25.

The budgets high borrowing target of Tk 160,950 crore (64% of total budgetary resources) is expected to put pressure on domestic liquidity and crowd out the private sector from the banking system.

Masrur in his short speech also  emphasized the need for the government, policymakers, and the central bank to work together to control inflation and implement effective measures.

The speakers also highlighted that budget formulation and implementation should be handled by separate entities.

The discussion also addressed challenges such as a declining foreign exchange reserve, the balance of payment deficit, energy sector demand-supply imbalances, and a struggling banking sector.

AmCham recommended prioritizing foreign exchange reserves, tax and VAT policy, social safety nets, and renewable energy.

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