Reduce cost of business

The upcoming budget should have measures to boost investment, reduce cost of business and support sectors affected by the recent political violence, said industrialists and economists yesterday.

"We hope the budget will inject life into the investment scenario and reduce cost of doing business," said Syed Nasim Manzur, president of the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI), at a pre-budget discussion at the auditorium of the chamber in the capital.

He urged the government to increase the infrastructure spending to 4 percent of the GDP from 2.1 percent now.

"There has been a huge change in the rural economy. So, allocation for agriculture and rural development has to be increased. If we can do that, it would bring about a revolution in the country."

The entrepreneur requested Finance Minister AMA Muhith, who was present at the discussion, to create a Tk 250 crore fund and lend exporters at 5 percent interest rates from the fund until the euro appreciates.

MCCI, the country's oldest trade body, organised the discussion in association with Maasranga Television.

Speaking there, the finance minister said he would set revenue generation target at Tk 176,000 crore for the forthcoming fiscal year.

"We have expanded the workforce of the National Board of Revenue in the last six years. We hope to reap the benefits of the increased manpower from this year," Muhith said, adding that he was planning to do "something" for the exporters affected by the drop in the euro exchange rate.

AB Mirza Azizul Islam, former finance adviser to a caretaker government, said he did not think the budget plan Muhith presented was realistic. "The revenue target is not realistic either. The tax net has to be expanded. In some cases, the taxes have to be reduced."

He pointed at the quality of spending under the annual development programme (ADP) as the implementation rate goes up riding squarely on the expenditure in the last two months of every fiscal year.

Ahsan H Mansur, executive director of the Policy Research Institute, said the budget should pay more heed to farmers and workers.

He also requested the government to stand by farmers with financial support so they can stock their rice until the price goes up. "The farmers should not go broke."

On attracting private sector investment, he said: "The Board of Investment has to be made functional. If needed, there has to be a change in its leadership."

Mustafizur Rahman, executive director of the Centre for Policy Dialogue, said there needs an improvement in the rate of investment and its quality in order to achieve the targeted GDP growth.

"There has to be allocation for setting up special economic zones on an urgent basis. Priority has to be given to public-private partnership projects," he said, calling for timely implementation of the projects to avoid cost escalation.

AK Azad, former president of the Federation of Bangladesh Chambers of Commerce and Industry, urged the government to withdraw duties on newsprint import and value added tax on the industry, as the sector is struggling to stay afloat.

Salehuddin Ahmed, former governor of Bangladesh Bank, opposed the government's practice to recapitalise loss-making state-run commercial banks at the expense of taxpayers' money. "This is not right. The government should ask them to reduce default loans."

Hossain Khaled, president of Dhaka Chamber of Commerce and Industry, said the recent political turmoil had inflicted long-term losses on the businesses. "So, the government should exempt value added tax owed to small businesses for three months of the political turmoil. It will have a positive impact [on the businesses]."

Aftab Ul Islam, president of American Chamber of Commerce in Bangladesh, stressed the need for ensuring investment certainty.

"You can achieve many things through intimidation, not investment. Local investors want certainty. Foreign investors want more certainty," he said.

Former MCCI president Syed Manzur Elahi said there has to be investment in skill development. "We can't industrialise the country without developing a huge pool of human resources."

Shusmita Anis, a director of ACI Limited, said it would take years for firms and companies to recover from the losses incurred during the recent political turmoil. "So, the budget should come up with measures so we can recover the losses."

Nihad Kabir, a member of the MCCI, moderated the discussion. Former MCCI presidents Rokia Afzal Rahman and Latifur Rahman, among others, were present at the discussion.