Measures needed to reduce inflation

Staff Correspondent: Bangladesh has to go through challenging times ahead. At this time, the budget must be adopted in line with the contractionary monetary policy. The size of the budget looks set to be exceptional compared to the past. Because, if inflation is taken into consideration, it may be lower than last year. Effective steps should be taken to reduce inflation, to restore stability in the economy, even if the growth is given some concession. Whatever the size of the budget is decided, what matters is how efficiently the budget will be implemented. It is most important to restore macroeconomic stability by ensuring efficiency and good governance in the implementation of the budget. In an interview Prof. Dr. Mostafizur Rahman honorable Fellow of Center for Policy Dialogue (CPD), a private research organization, said.
Economist Professor Dr. Mostafizur Rahman said, “Whatever the size of the budget is determined, the most important thing is how efficiently the budget will be implemented.” The result of the implementation of the budget will depend on it. Therefore, efficiency, good governance, transparency and accountability must be ensured in the implementation of the budget. Education, health and social security sectors should be given top priority in sectoral allocation. New projects to be selected; It should be taken into consideration how much priority it currently deserves. NBR needs to take more proactive steps to raise revenue. Priority should be given to direct taxes rather than burden of indirect taxes on the common man. NBR should be digitized to prevent tax evasion.
Honorary Fellow of CPD said, “IMF has a prescription.” But, the interests of the country must be prioritized. There will be pressure to withdraw existing tax exemptions in various cases. In some cases, the withdrawal of tax exemption should be considered. Also, in some cases it should be continued. Tax exemptions should be kept in the case of daily necessities, so that there is no additional burden on the common man. Allocation to social security programs should be increased.
He said, “There has been a decrease in money. Import prices will increase. Efforts should be made to collect direct taxes. There will be some concession on import duty. The tax exemption structure, especially in the case of essential goods, deserves a review. Tax exemption structure and overall tax structure should be investment friendly, low-income people friendly. Tax evaders and those who have taken illegal money should not be exempted. Zero-tolerance should be shown in their case.’
The economist suggested increased investment to strengthen and digitize the National Board of Revenue-NBR, the revenue collecting body. He said, NBR should be strengthened. More investment should be increased in this institution. Investing in NBR, fully digitizing imports, VAT and customs, establishing interoperability between various agencies, will further accelerate the revenue collection of the government.
Mostafizur Rahman said, ‘Income inequality is increasing in the country. Therefore, direct taxation should be given more importance to reduce inequality. Reform of tax structure, increasing efficiency in tax collection, fair distribution of resources, efficiency in budget implementation – these should be given more attention. With some concession to growth, effective measures to reduce inflation should bring stability to the economy. Emphasis should be placed on enhancing the efficiency of government service providers to stimulate investment and employment.
Reserves are decreasing – what can be done? In response to such a question, Mostafizur Rahman said, “Now the most important thing is to bring all of our exports and remittances to the country.” Export earnings and remittances should be ensured to return to the country. Active syndicates here must be eradicated. It should be ensured that the entire income of remittances comes to the country through banking channels. Money has been reduced. But it has created new incentives in exports and remittances. Government can reduce subsidies in these sectors. This will reduce the burden of government expenditure to some extent.
Above all, Mostafizur Rahman believes that ensuring efficiency and good governance in budget implementation is the most important to restore macroeconomic stability.