Economy likely to face crisis during loan repayment23 May 2022
Staff Reporter :
The country's economy is likely to face a severe crisis when repayments of foreign loans, taken for ongoing megaprojects, start to pile up, the economists said.
Calling the repayment period "red alert", they estimated that the period would be started from 2026-28 and suggested not taking any megaproject and expanding projects' tenure to avoid the crisis.
In addition to income and wealth inequality, they said health and education inequality is also increasing in the country.
They came up the comments while speaking at a press conference title "Alternative budget proposal 2022-23: A democratic budget proposal" organized by Bangladesh Economic Association (BEA) at its head quarter in the city on Sunday.
"The number of poor people has doubled due to the Covid-19 pandemic. Reducing of this inequality should be the main goal of the next five consecutive national budgets, starting with the upcoming budget proposal," said Dr Abul Barakat, President of the BEA.
He also suggested the government not to take loans from the domestic banks to meet budget deficit in order to facilitate private sectors.
In a written alternative budget proposal, he informed that the total amount of black money generated in the country in last 47 years from 1972-73 to 2018-19 is estimated Tk 88.61 lakh crore and the amount of laundered money is around Tk 7.98 lakh crore.
Placing Tk20,50,036-crore budget proposal for the upcoming 2022-23 financial year, he recommended the recovery of at least 2 per cent (Tk 1.77 lakh crore) of black money and 10 per cent (Tk 79.83 thousand crore) of laundered money to finance the budget deficit.Other than these two, the BEA proposed widening and adding taxes in several local sources to finance the deficit.
It suggested wealth tax, tax on excess profits, tax on luxury goods, cancelling car tax exemption on MPs and others, tax on foreign nationals, tax on services, air transport and travel tax, income from royalty and assets, sale of government assets, receipts for irrigation, wire and telephone boards, telecom, regulatory Commission, energy regulatory commission, insurance Regulatory Commission, securities and exchange commission, municipal holding tax, DG health, private hospital permission and renewal fees, pharmaceutical license and renewal fees, beauty parlour services tax, hotel capacity tax, foreign consultation fees, among others.
Moreover, annual estimated inflation should be kept between 5 to 7 per cent. Inflation cannot be allowed to reach a level that will put the economy in a vicious cycle of inflation, the BEA president said.
Dr Barkat said that they have placed such a huge budget proposal considering the global economic situation, Covid-19 pandemic, and the impact of the ongoing Russia-Ukraine war.
The proposed budget of the BEA is around 3.40 times higher than the original national budget size of the current fiscal year which is Tk 6,03,681 crore or 17.5 per cent of GDP.
The proposed budget of BEA is pro-people and pro-democracy, Dr Barkat said, adding that the main aim of their budget is to include the 70 to 80 percent of country's people into sustainable middle class over the next 10 years.
Besides, it has aims to address inequality and lowering down the poverty rate at the lowest level which would ensure establishing a civilized social system in light of the spirit of the War of Liberation.
The alternate budget proposal of BEA consists of some 38 recommendations where Tk 18,70,036 crore (91.2 per cent) will come from the government revenue while the rest Tk 1,80,000 crore (8.7 per cent ) will remain as budget deficit.