The country鈥檚 business leaders on Thursday expressed their mixed reactions over the proposed national budget for the financial year 2024-25 placed by the finance minister, Abul Hassan Mahmood Ali, in the parliament.
They expressed concerns over the target of bank borrowing for the deficit financing and said that if the government borrowing increased, it would hamper the private sector credit growth.
They also urged the government to increase the tax-free income level for the individuals considering the current inflation.
The federation of Bangladesh Chambers of Commerce and Industry president Md Mahbubul Alam, in his initial reaction to the proposed budget, said that the government planned to borrow Tk 1,37,500 crore from banking source for the deficit financing would limit access of private sector businesses to the bank loans.
He also said that apparently it would be challenging to achieve the tax revenue collection target of Tk 541000 crore.
But increasing tax net could help the government to achieve the target, the FBCCI president said.
Mahbub termed the proposed budget logical and realistic saying the government should not take any ambitious project to fulfil the target of bringing down inflation at the rate of 6.5 per cent in the next financial year.
The FBCCI also urged the government to increase the individual鈥檚 tax free income celling and to withdraw the advance tax and advance income tax.
Dhaka Chamber of Commerce and Industry president Ashraf Ahmed said that revenue collection would be the main challenge in implementing the proposed budget.
He said that without widening the tax net, it would be difficult to collect higher revenue.
He also mentioned that overcoming the liquidity crisis was essential for achieving the growth target and it also would depend on various macroeconomic scenarios and global geo-economic conditions.
Ashraf said that although the government鈥檚 bank borrowing target remained lower than the last fiscal, it is still high.
He said that if the government borrowing increased, the private sector credit flow might shrink.
The DCCI president welcomed the initiative of a prospective tax system in place for the financial year 2024-25 and 2025-26, saying that it was a good move and it might help boost foreign direct investment.
Considering the challenging time, the proposed budget is a 鈥榯imely budget,鈥� Ashraf said.
Anwar-ul Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries, said that the government showed its intention to address the current economic challenges by proposing a realistic budget.
It is true the existing industries will fail to gain business growth as high inflation has slowed the demand but the government will have to ensure a favourable environment for the future growth, he said.
The business leader said that both the local and export oriented business had been suffering due to the frequent policy changes in the Bangladesh Bank and the National Board of revenue.
The prices of gas and electricity have been increasing gradually but industries are not getting uninterrupted supply, he mentioned.
Parvez said that without ensuring timely exports and local supply it would be difficult to bring down inflation.
The business leader also urged the government to arrange fund from external sources for the deficit financing to ensure private sector investment and employment generation.
Bangladesh Association of Software and Information Services president Russell T Ahmed said that policies like tax exemptions were needed to reach a $50 billion digital economy by 2041.
He urged the government to maintain current duty-free facilities for investors in economic zones and to withdraw proposed 1 per cent import duty on capital equipment.
The BASIS president also said that the current budget proposed duties on mobile phones based on prices, which needed revision.
Prioritising mobile phones, smartphones, and smart devices is crucial for Smart Bangladesh, he added.