In its third and final reading on the current, or outgoing fiscal (2022-23), the Centre for Policy Dialogue (CPD) presented a grim picture this week, just days before the budget for 2023-24 was set to be placed in parliament. The economy-focused think tank revealed its own calculation that revenue shortfall would be approximately Tk 75,000 crore in the current fiscal, causing the budget deficit to widen.
"The government borrowed Tk 54,501 crore from the Bangladesh Bank until February and media report the borrowing from the central bank rose to Tk 74,393 crore until April of this fiscal year, this brings a negative impact on the macroeconomy," it said.
CPD hinted that the government borrowing from domestic banks will create inflationary measures in the economy. Rather it suggests the government should prioritise mobilising foreign-funded budgetary support.
CPD Executive Director Dr Fahmida Khatun presented the think-tank's periodic review of the Bangladesh Economy, this being the third of the 2022-23 fiscal, at CPD's office in Dhanmondi on Saturday.
Although the price of fuel is falling in the international market, its effect is not seen in the domestic market, she pointed out.
CPD said Bangladesh Petroleum Corporation's total profit in the last seven years (from FY2015-16 to FY2021-22) was about Tk 43,804 crore. After paying Tk 7,727 crore as income tax, BPC's net profit was Tk 36,074 crore. Being a monopoly and state-owned enterprise, enjoying windfall gains by penalising the citizens of the country cannot be justified, it said.
The think tank suggested the government look into the surge of inward remittance from the USA instead of the Middle East, where a large number of Bangladeshi expatriates are working.
It noted that in 10 months of FY 2021-22 (July-April), around $3.86 billion remittances came into the country from Saudi Arabia, but in the same period of the current financial year, remittances decreased to $3.04 billion.
Rather bizarrely, CPD suspects the sudden increase in remittances from the USA could be recycling of smuggled money that was sent from Bangladesh to America in different shapes of trade-based money laundering.
It suggested cutting on duty of daily essential products used by common people temporarily as a relief to reduce price. In that case market monitoring is also necessary.
The scope of direct assistance to the poor needs to be increased, in CPD's view. It is also necessary to ensure that the right people are getting it. Export growth rate is not positive and falling short of target, it noted. In May and June (Last two months of the current fiscal year) it should be increased by 41 percent, which is very difficult.
Distinguished fellow Professor Dr Mustafizur Rahman, Research Director Professor Khondaker Golam Moazzem Hossain, senior research fellow Tawfiqul Islam Khan, among others, spoke on the different issues.
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