Economy in grave situation: Khaleda

The Bangladesh Nationalist Party chairperson, Khaleda Zia, presents the party’s thoughts on the national budget at the Ruposhi Bangla Hotel in Dhaka on Wednesday.

BNP’s major budget proposals

*    Ceiling of tax-free income at Tk 3 lakh
*    Interest-free foreign employment loan
*    No tax on saving certificates
*    25pc VAT cut on small businesses
*    VAT-free doctor’s fee, tuition fee, transport fare
*    8pc cash incentive for textile industry
*    2nd Padma bridge & 2nd Jamuna bridge with railway
Staff Correspondent
The leader of the opposition and chairperson of the Bangladesh Nationalist Party, Khaleda Zia, on Wednesday blamed the government for pushing the country’s economy into the ‘gravest situation in the last two decades’ by its ‘inability and inefficiency’.
Khaleda portrayed a gloomy picture of all economic indicators and put forward 13 recommendations for the national budget of the next fiscal year, apart from asking the government to ensure transparency in economic management and to curb corruption.  Khaleda presented her party’s thoughts on the national budget for FY2011-12 at the Winter Garden of Ruposhi Bangla Hotel in presence of economists, trade and business analysts, business leaders, academics, civil society leaders, diplomats, and journalists.
The BNP last year also presented its proposals on the current national budget, which was the first time in the country’s history that an opposition party had done so.
‘The Bangladesh economy is passing through a difficult time. All the macroeconomic indicators in the current fiscal year are quite negative. This is for the first time that the Bangladesh economy has fallen into such danger in the last two decades,’ said the BNP chairperson.
She blamed the current economic crisis on the government’s practice of crony capitalism.
‘As soon as the present government assumed power, they intentionally and calculatedly indulged their cronies and their party’s cadres, leaders and activists, and partisan businessmen and awarded them contracts, dealerships, and many other economic benefits illegally and unethically, thereby creating a terrible state of anarchy in the economic, social, and political fields,’ she said.
Khaleda referred to the price-hike of fertilisers and essential commodities, rising inflation, reduced foreign aid inflow, slide in manpower export, giving undue transit to India, lethargy in implementation of Annual Development Programme, risk of macroeconomic instability, and the sorry state of the power and energy sector.
Quoting statistics of the Real Estate & Housing Association of Bangladesh, Khaleda said about 5,000 readymade flats could not be given electricity connection. ‘At present there is an additional demand for 1,400MW of electricity,’ she said.
Khaleda Zia came down heavily on the government’s policy to ‘give the neighbouring India various economic benefits’ which had weakened many local industries.
She also spoke of the country’s export and import scenario. ‘Despite the recent growth in export, the surge in import has caused an overall decline in the net foreign exchange transactions. The present current account surplus is likely to turn into a deficit after adjustment of all the accounts at the end of the financial year on June 30.’
‘The government has recently increased the price of urea fertiliser by 67 per cent, which will have considerable negative impact on agricultural production,’ she remarked.
She said Bangladesh’s economy had undoubtedly reached a dangerous stage as in April 2011 the point-to-point rate of inflation was 10.67 per cent, average inflation 8.54 per cent, and food inflation 14.36 per cent.
Pointing out that the BNP started the practice of placing the opposition’s budget proposals last year, Khaleda regretted that the government had not paid any attention to the suggestions.
Terming the loan agreement with India 100 per cent against the country’s interests, Khaleda said the interest on the World Bank’s loans is 0.73 per cent, whereas the interest on the Indian loan is 1.75 per cent.
She said the government’s indecision and unskilled administration together were responsible for the failure to implement the ADP of FY 2010-11.
The roads and highways sector is also in jeopardy, she said.
She slammed the government for its reported move to establish a special economic zone in Bangladesh for Indians. ‘A proposal from an Indian trade organisation for establishment of an exclusive economic zone near the border in our country for Indian investors is under the active consideration of the government,’ she mentioned.
She also alleged that two inland container terminals – one at Pangaon in Dhaka and the other at Ashuganj – were being handed over to some foreign quarters. ‘This will serve the interests of the foreign countries as they will be able exploit those ports, bypassing our seaports, which will adversely affect our economy as well as our national security,’ she said.
Khaleda recommended introduction of a cooperative system for the peasants to ensure their control over procurement, quality control, storage, and transport of their produces so that they get fair prices.
‘For this purpose the Bangladesh Rural Development Board needs to be strengthened. Tk 500 crore needs to be allocated for this purpose, by whatever means,’ she said.
Other proposals of the BNP for the next budget included allocation of about Tk 150 crore for rehabilitating and mitigating the sufferings of the Aila victims; sufficient allocation for constructing cross-dams in the coastal areas to catch the silt brought by rivers from upstream, which can lead to large-scale reclamation of land; provision of ‘foreign employment loans’ without interest; withdrawal of tax at source on savings certificates; setting the upper limit of tax-free income at Tk 3,00,000 instead of Tk 1,65,000; reduction of lump-sum VAT collection from small businessmen by 25 per cent; refraining from expanding the VAT base; and withdrawal of VAT on doctor’s fee, tuition fees of private universities, house/office rent, and transport fare.
Without making any direct proposals to the government, Khaleda said, ‘The projects we are contemplating include high-speed rail (250km/hr-300km/hr) connection between the divisions, a six-lane Dhaka-Chittagong highway, construction of 2nd Padma Bridge and 2nd Jamuna Bridge with railway.
Khaleda also put forward five proposals for saving the country’s spinning, weaving, dyeing, and finishing industries: to ascertain whether or not India is dumping yarns and fabrics in the country and to raise the issue in the appropriate international forums if it is being done; provision of cash incentives of 8 per cent instead of 5 per cent for the textile industry; establishment of a ‘textile rehabilitation fund’; lowering the interest rate on loans offered to the textile and spinning sectors; and provision of 15 per cent cash incentive for the handloom industry.