New budget lacks execution plan: CPD

The Centre for Policy Dialogue or CPD has said there is very little scope for enhancing the delivery efficiency of the budget announced for fiscal 2017-18.

“One will have to get the political economy right,” the CPD said in its analysis on Friday, a day after Finance Minister AMA Muhith rolled out a Tk 4 trillion outlay, the biggest in the history of Bangladesh.

“The Ministry of Finance needs to come up with a bold implementation plan, building on some of the ideas mentioned in the budget,” it said.

“The time for that may have come and gone.”

For its part, the CPD made a series of recommendations. The think-tank advised the government to establish an independent fiscal policy authority and separate the existing unit from the revenue collection authority.

The CPD has also called for the government to introduce a separate but integrated budget for local government and set up a permanent local government financing commission.

Other recommendations:

·            Integrate NGO financing in the public expenditure structure

·            Set up an independent Public Expenditure Review Commission

·            Set up an independent Financial Sector Reform Commission

·            Set up an Agriculture Price Commission

·            An independent statistical commission to validate the macroeconomic correlates

Muhith set a target for economic growth at 7.4 percent for the year starting Jul 1. Inflation will come down to 5.5 percent, he said in his budget speech.

In its analysis, the CPD said the declining non-food inflation drove consumer prices down to 5.39 percent as of March.

However, the government decision to increase gas and electricity prices and not to lower fuel prices may change the situation.

Food inflation is seen on an increasing trend. Coarse rice traded at Tk 45-46 per kg which is a 42.2 percent rise from last year.

The CPD criticised increased excise duty on bank accounts.

While it was done by the government for a revenue boost, the new move will act as disincentive for those using banking channels in times of falling interest rates on savings, the CPD said.

The proposal of increasing the excise duty from Tk 500 to Tk 800 a year, for example, on account balance of more than Tk 100,000 drew criticism from a wider spectrum of society.