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Dr Mashiur emphasizes on increasing productivity, market diversification

BI Desk || BusinessInsider

Published: 00:47, 13 June 2024  
Dr Mashiur emphasizes on increasing productivity, market diversification

Photo: Collected

Prime Minister's Economic Affairs Adviser Dr Mashiur Rahman on Wednesday emphasized on increasing productivity as well as focused on more product and market diversification.

Dr Mashiur said this while addressing a post-budget (2024-2025) discussion titled "Budget Insights: Challenges and Opportunities" as the chief guest held today at the MCCI's Gulshan Office.

The MCCI organized the event in collaboration with the Policy Research Institute (PRI). The event was moderated by Habibullah N. Karim, senior vice president, MCCI.

MCCI president Kamran T. Rahman gave the welcome remarks followed by Dr. Zaidi Sattar, chairman, PRI, making his introductory remarks.

Later, two keynote presentations were delivered by Dr. Ahsan H. Mansur, executive director, PRI, and Adeeb H. Khan, member, Tariff and Taxation Committee, MCCI.

This was followed by a brief question-answer session.

Dr. Zaidi Sattar wrapped up the event with his comments. Finally, Hasan Mahmood, chairman, Tariff and Taxation Committee, MCCI, offered the vote of thanks to the attendees.

The Prime Minister's Adviser stated that the liberalization of the exchange rate was a good move to deal with the macroeconomic challenges that the country was facing.

Given Bangladesh's unemployment level, Dr Mashiur believed in the need for further government investments and removal of bottlenecks.

He stated that the goal of bank mergers should be to improve the bank's capacity to lend and the suitability to borrow, thus increasing the banks' overall strength.

During his keynote presentation, Dr. Ahsan H. Mansur highlighted the macroeconomic context characterized by elevated inflation, reduced imports because of a shortage of US dollars, and sluggish export growth.

He advocated for a tight monetary policy stance to control inflation, achieve price stability, and maintain exchange rate stability, while letting the market determine interest rates.

Dr Mansur also emphasized the need to reduce government expenditure, particularly on administrative costs and subsidies, thereby limiting government borrowing from the banking system.

He said if the Bangladesh Bank takes a strong monetary policy, refrains from injecting too much liquidity support to commercial banks and does not print money to finance the budget deficit, then the inflation rate should start coming down within six to nine months.

Zaidi Sattar, chairman of the PRI, said the budget was in the right direction, being much more pragmatic and realistic in terms of expenditure.

"Some are saying that it is contractionary, but it is moderately expansionary compared to the revised budget," he added.

Zaidi Sattar said the budget deficit was the lowest in the last 15 years.

"Ideally, budget deficits support contractionary fiscal and monetary policies," Sattar said.

On the issue of "Made in Bangladesh" in the budget, he said it was a nationalistic idea.

He said if the policy support for Made in Bangladesh was geared towards sales in the global market, then there could be 7%-8% to growth, rising to 10%.

In his keynote presentation, Adeeb H. Khan discussed some selected income tax and VAT provisions from the Finance Bill 2024-2025.

In his welcome remarks, Kamran T. Rahman commended the reduction of the corporate tax rate by 2.5 percent for unlisted and one-person companies and recommended applying this reduction to other listed companies too.

However, he found the opportunity to whiten black money by paying 15 percent tax to be demotivating for honest taxpayers.

The MCCI President believed that only raising the tax rate without expanding the tax net will not achieve the desired tax-GDP ratio.

Before concluding, he expressed that having an interim evaluation of the budget after every three months would be very helpful.

In the question-answer session, topics that came up include excess AIT being charged as final tax, the possibility of introducing two separate authorities for tax and VAT, and the need for bank mergers to follow proper process and include experts in the merger committee.

The discussion was attended by members of the business community and the media.

Walton