|
|
Change Your Life! |
Non-inflationary
growth: Bangladesh’s prime goal |
|
News |
July 3, 2000
Dhaka
(UNB)- Government borrowing from banks so far has not had any negative
impact on inflation and liquidity to disturb macroeconomic management, the
Finance Minister said yesterday dismissing opposition contentions. He
claimed the record of financial management is reasonable compared to the
past regime in all respects. Prices
of essentials are steadied and point-to-point inflation was 2.7 in May,
and surplus liquidity in banks as of June 14 was Tk 3313.29 crore, Shah
AMS Kibria told a post-budget press conference at his ministry yesterday
(Sunday). “Non-inflationary
growth is our prime goal and we’ll not deviate from it,” he said.
Liquidity in commercial banks also remains at a desirable level to meet
loan demands from private sector. Bangladesh
Bank governor Dr Mohammad Farashuddin, National Board of Revenue (NBR)
chairman Abdul Muyeed Chowdhury and Finance Secretary Dr Akbar Ali Khan
were also present. Kibria’s
explanation came in response to some common concerns that government
borrowing might generate inflationary pressures and crowd out private
sector from necessary bank finances for industries. Apparently
rebutting his predecessor’s rancorous remarks on the fiscal measures in
the new budget,
the minister criticised what he called ‘making borrowing a
political issue’ and argued borrowing from banks is nothing new. Whenever
government needs, it borrows from bank as government’s income and
expenditure do not maintain same balance round the year, he told newsmen,
urging the critics to see borrowing in its total perspective and inviting
‘intellectual debate’ on economic issues. He
however claimed present government’s borrowing from banks is reasonable
compared to the past regime in all respects considering its ratio with
total deposit, budget and GDP. Citing
Bangladesh Bank figures, Kibria said borrowings from Bangladesh Bank,
which is more risky from inflation point of view, came down from the
height it reached during Siafur Rahman’s period. The
government borrowed Tk 1782.8 crore from Bangladesh Bank in 1995-96 fiscal
year which came down to 868 crore in 1999-2000 fiscal year. Borrowing
from banking system was 1.2 per cent of GDP, 7.8 per cent of total deposit
and 9.2 per cent of total budget in ‘91-92, which came down to 1.1 per
cent, 2.6 per cent and 7.7 per cent, according to figures complied by the
central bank. Kibria
compared criticism of borrowing, when it rose sometime in the middle of
the just-concluded fiscal year for obvious reasons, with that of an
‘artificial liquidity’ crisis three years back. Describing
the loan flow as satisfactory, the economic pointsman of Awami League
government informed total lending in July-March period of 1999-2000
amounted to Tk 8508 crore and was expected to exceed Tk 10,000 crore by
the yearend. Total
loan figured Tk 9235 crore in 1998-99, including 1330.10 crore in term
lending and Tk 7905.49 crore as working capital. The
Finance Minister referred to the budgetary measures, including duty
reduction on imported raw materials and machinery, creating Equity
Development Fund and reducing interest rate to encourage industrial
investment. Responding
to criticism often made by opposition camp against the present government
for opening Bangladesh market to foreign goods, he said the previous
government drastically reduced tariffs and offered special facilities for
some Indian goods. “This
was how they opened our market for India by offering discriminatory
tariffs.” Replying
to a question, Kibria said the government is making all-out efforts to
accelerate utilisation of foreign aid. Bureaucracy sometimes is blamed for
delaying project implementation, he said, but donors’ procedures
sometimes are no less responsible for such delays.
|