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Fuel, fertilizer prices may go up |
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March
14, 2000 Finance
Minister Shah AMS Kibria has said the government is seriously thinking of
increasing prices of oil and fertilizer in the greater interest of the
economy. The
economy as a whole is recovering well from the recession caused by the
devastating flood of 1998. Agriculture and industries sectors are
performing satisfactorily with a positive impact on export, he said. But
these will not contribute significantly to the growth of the economy
without adjustment in prices of oil and fertilizer which are subsidized,
the minister said at a meeting with the Economic Reporters Forum (ERF) in
the city yesterday. He
however said any increase in oil prices would affect farmers who use
diesel for boro cultivation. “But
one has to understand that subsidy in any sector is not good for the
economy as there is chances of distortion. So in the greater interest of
the economy, we have to take some very unpopular decision,” Kibria said.
“We need to adjust prices of oil and fuel to save the economy
bankruptcy.” Production
of aman crop was “very good” this year and prospect of boro is also
similar. “Basing on available data, we are expecting five per cent
growth in agriculture. It may be higher if there is a super bumper boro
production.” The
present food stock is 15 lakh tones, with sufficient stocks with farmers
also. “The food stock may cross all previous records if boro production
is up to the expectation.” The
finance minister hoped that it would be possible to achieve the current
financial year’s 4.8 percent growth target in the industrial sector,
with 5.2 percent for large industries and four per cent small industries. The
sector is recovering well form the affects of 1998 flood. Growth rate in
the sector had slumped to as low as one to 1.5 percent with exports at
three to 3.5 percent, he mentioned. Term loan and working capitalKibria
said disbursement of terms loans to the industrial sector increased by 15
percent to Tk 697.44 crore during July-December (1999-2000 FY) from Tk
603.99 crore in the corresponding period in the previous fiscal. He
said that the central bank governor had provided him with these figures
and there was no scope to deny these. “So, I stand by my claim which was
wrongly communicated to different quarters.” The
minister said growth in working capital loans was 42.75 percent,
reflecting good performance by the industrial sector. InflationKibria
said that the point-to-point inflation rate was stable at 3.80 percent in
December. “It is more or less the same for January and February and is
unlikely to expected five percent”. Import, export and remittanceThe
import sector grew by 9.9 percent, rising to US $3151 million during
July-November this fiscal from US $2867 million in last fiscals
corresponding period, he said. Imports during July-November in the last
financial year included four million tones of food grains, he added. The
good performance of the economy is also reflected in the export sector,
which grew by seven percent during July-January this financial year.
Export earning totaled US $3187 million during the period million, the finance minister said. During
the period, remittances increased by 16.71 percent to US $16.71 percent to
US $1125.19 million from US $ 964.05 million in last fiscals
corresponding. Remittances were around US $196 million both in December
and January, he said. This
was due to actions taken against Hundi business. Kibria
said that the foreign currency reserve was also sound with US $ 1.67
billion in February. Revenue and government borrowingThe
financial minister however said that the shortfall in revenue was about Tk
1200 crore till February, which, he hoped, would improve n the coming
days. He
said the government had to give price support to farmers to keep the
market stable in view of good production of food grains. “Originally, we
had a budget of around Tk 500 crore to buy food grains but it was
increased to Tk 1100 crore. We had to borrow additional money from
banks.” Regarding
the annual development program (ADP), the minister said that government
did to cut the Tk 15500 original plan despite shortfall in revenue. Source:
The Daily Star |