It’s crunch time

Posted: জানুয়ারি 30, 2009 in Uncategorized

Judicious government spending called for

Achieving government revenue targets in the current fiscal may be difficult as import duty collection figures up to December showed a definite downturn. The knock-on effect of the global recession is being felt there. A fall in the world commodity prices is adversely affecting realisation of import duty. But we had set the rate of import duty and the revenue target on the basis of what was then an upward spiralling of commodity prices in the world economy.

Concurrently, there is also a growing apprehension that collection of VAT and income tax could taper off due to recession.

In other words, some important targets for internal resource mobilisation may have to be revised downward. As a result, we could be facing difficulty in counterpart financing of the foreign-aided development projects.

The NBR in a report to the finance ministry has clearly sounded a note of apprehension to the effect that achieving the revenue target is going to be the biggest challenge in the face of the negative impact of the ongoing world economic crisis. Little wonder, the NBR report rivets on a potential source of revenue collection, estimated to be worth around Tk2,500crore which is linked to 20,000 under-trial corruption cases. A quicker settlement of the cases requires energetic coordination among the NBR, ministry of law and the office of the attorney general.

However, when such is the overall outlook of revenue collection, it is of pivotal importance that the government exercises utmost prudence and control in expenditure, both revenue and development. There have been news reports lately that the government was contemplating to spend a huge sum of money to import luxury transports for the MPs and upazila chairmen, each reportedly priced between Tk20 and 75lac. If this is true, nothing could be more outlandish for a country like ours which it can ill afford.

As a matter of fact, we would implore the government to quickly identify the areas where wasteful expenditure can be contained and heads under which money can be saved. Our understanding is that the government is keeping vigil on corruption and procurement fronts, but it is our suggestion that along with the anti-corruption angle, the government value judicious spending and set on the roll a certain well-conceived set of austerity measures that will enhance its prestige and effectiveness.

The daily star 30.01.2009

 

 

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