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Finance Minister defends his budget |
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News |
June 29, 2000
Sangsad Bhaban (UNB) - Finance Minister Shah AMS Kibria in Parliament on Wednesday ridiculed his critics saying he was on the right path of economic management of the country.
"I believe these policies and programmes will be able to lead our beloved motherland to a wealthy state within 2020," he said brushing aside all criticism about the proposed budget for fiscal 2000-2001.
The Finance Minister said the steps taken by the present government had not only gave a strong foundation to the economy, but also opened up a bright future for the country.
"We don't want to stop only modernising the agriculture, but continue to set up agro-based industries and exporting industries of agro-products.
“We’ve also took practical measures to encourage the traditional industries. We are giving direct financial support to the readymade garments, leather industry and jute industry. Frozen fish and tea industry are also getting different supports.”
“Above all,” he said, “we are giving priority to the human resource development and infrastructural development."
Countering the criticisms on the proposed budget, Kibria alleged that finding no issue to criticise they (critics) even launched personal attacks on him.
On the issue of much talked about bank borrowing provision in the budget, the finance minister in his detailed reply quoted a comment of Prof Rehman Sobhan who apparently supported the bank borrowing.
Rehman Sobhan quoted as saying: "Most of my fellow economists appear unduly preoccupied with the evils of deficit financing and macro-economic stability...I broadly support a discrete dose of deficit financing so I am less exercised than my colleagues about its use by Finance Minister. How large a dose is tolerable will depend on the state of economic activity during the next year in the commodity producing sector, particularly foodgrains, the level of private investment demand and the liquidity in the banking system."
"Last year, the extent of bank borrowing in Bangladesh rose but the rate of inflation declined. This moderated inflation rate owed to good crops which kept foodgrain prices stable and also to weak investment activity. In such circumstances, to leave money idle in the banking systme is not only deflationary bud bad economics," Kibria quoted the Professor as saying.
Giving comparative data of the present and past government, the finance minister said: "The record says, Saifur Rahman can't talk high. I would like to request him to see his own face in the mirror. At the same time, I request him not to confuse the countrymen by telling lies."
Referring to massive loan from the Bangladesh bank during the fiscal 1995-96 when Saifur Rahman was the finance minister, Kibria said: The record says that Saifur Rahman took Tk 1,782.8 crore from the Bangladesh Bank.
He said: “None of the governments till date took such a huge amount from the Bangladesh Bank. We have reduced borrowing from the Bangladesh Bank to Tk 937 crore this year."
On bad impact of loan from the Bangladesh Bank, the finance minister said: "Loan taken from the Bangladesh Bank is called high-powered money because it is actually printing new notes. In 1995-96, Saifur Rahman created severe inflationary pressure in the economy by taking Tk 1,782.8 crore."
On the issue of inflation, the finance minister said the present government in 1996-97 fiscal year brought down the inflation rate to 2.52 per cent, which was 8.87 per cent in 1994-95 during the BNP regime.
Because of the floods, the rate "unfortunately" rose to 8.87 per cent in 1998-99 fiscal year, but following of conservative policies, the rate has been brought down to 2.70 per cent in May last, he added.
Finance Minister Shah AMS Kibria said that the credit flow to the industrial sector would cross Tk 10,000 crore, including Tk 7,350 crore as working capital, during the current fiscal year.
"Most of those who tell that they don't get loan, banks don't give credit are defaulters. Good entrepreneurs get credit and thus investment is increasing, " he said.
In 1994-95, he said, credit to the industrial sector was abnormally high and maximum loans became default loans.
Replying to Professor Emajuddin on the issue of increasing allocation for the Prime Minister's office, the finance minister said in reality, allocation for the main Prime Minister's office was only Tk 15.09 crore which is only 0.78 per cent more than the revised budget.
Out of the total allocation, fund for the Asrayan project, canal digging programme, BEPZA and Food for Work are Tk 115 crore, Tk 30.13 crore, Tk 45 crore and Tk 38 crore respectively.
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