Monday, June 7, 2004
Bangladesh eyes six per cent growth in 2004-05
Reuters Dhaka, June 7
Bangladesh will aim for economic growth of at least six per cent in the year through June 2005 as it seeks to reduce poverty, Bangladesh Finance Minister M Saifur Rahman said on Monday, ahead of the annual Budget due this week.
Agricultural subsidies would jump and the focus would remain on helping Bangladesh's poor, Saifur said.
But analysts said the projected growth was still not enough to make a big dent in poverty, which afflicts half the country's 130 million people.
Bangladesh was "well on course" to achieving a targeted 5.5 per cent growth of gross domestic product (GDP) in the 2003-04 fiscal year ending on June 30, Saifur told Reuters in an interview ahead of the Budget, expected on Thursday.
"But we will set a GDP growth target of between six and seven per cent for the new year as the current growth rate is not enough to fight poverty."
Finance ministry officials said Saifur might propose a total outlay of 600 billion taka ($9.9 billion) in the 2004-05 budget, up more than 15 per cent from the 2003-04 year.
Saifur said agricultural subsidies could be trebled to 9 billion taka ($148.9 million) from the present 3 billion taka.
"Since agriculture is the mainstay of Bangladesh's economy, contributing nearly 35 per cent in the GDP, we must give special attention to increasing agricultural output," the minister said.
"This sector needs efficient irrigation management, better seeds and more fertilisers to yield more."
Other priorities were energy, road transport, education, rural development, health and population control, Saifur said.
Economic analysts said Bangladesh needed GDP growth of eight per cent or more a year to meet the Government's target of halving poverty by the year 2015.
They said attaining higher economic growth could be possible if there was political peace and good governance in the South Asian country, where the Opposition has been running a campaign of street protests and strikes to try to force the Government from office.
Tax officials said the 2004-05 budget would plan for a 16 per cent increase in revenue income, in line with suggestions from the International Monetary Fund.
The Government revenue target for the current fiscal year was 277.5 billion taka ($4.6 billion), up 17 per cent.
Bangladesh tax officials hope to boost the current list of 1.3 million registered tax payers by 500,000 in the next year, in a drive to end widespread tax evasion.
Businessmen would face wealth checks that compared the income they declare with their spending and company trading data.
"We have set up a special cell to track down the big fish who often manage to get out of the tax net," one tax official said.
In addition to domestic revenue, Bangladesh expects to earn 228 billion taka ($3.8 billion) next year through its annual development programme (ADP), of which overseas donors pay nearly half.
The Government recently revealed that only 45 per cent of this fiscal year's ADP funds had been used by May, with just one month of the 2003-04 year to go, due to slow implementation of projects.
© HT Media Ltd. 2004.