Slow revenue collection, export growth worry govt

Slow revenue collection and downtrends in  exports and imports as well as spiralling essential prices made it difficult for  the government to keep the macro-economic stability.

At a meeting of the coordination council on macro economy and budget management, the government’s economic policymakers on Monday viewed the poor  revenue collection with anxiety as the revenue earning shortfall in the first four months of fiscal 2019-20 already exceeded  Tk 40,000 crore.

They took the decision to halt the negative growths in exports and imports to avert any ‘critical situation’.

Chaired by finance minister AHM Mustafa Kamal the meeting also discussed the current  essential price spirals and took the proposal to  increase the subsidies on fertilizers as well as to the rice growers.

The meeting over, the finance minister told reporters that instructions had been given to the government agencies to improve revenue collection and the exports.

He, however, did not elaborate the matter.

The meeting was attended among others by commerce minister Tipu Munshi, Bangladesh Bank governor Fazle Kabir and secretaries of the finance division, the internal resources division, the general economic division, the economic relations division, the financial institutions division and the agriculture ministry.

Officials said the finance minister asked the taxmen to speed up installing electronic VAT collection machines to increase VAT collection.

The revenue incomes, according to officials, stood at around Tk 65,000 crore, a shortfall by over Tk 40,000 crore during July to October.

Amid poor revenue growth, the government’s  borrowings from the banks soared by 43.98 per cent or Tk 39,331.47 crore year-on-year on September 24 of this fiscal.

Simultaneously, the country’s export earnings dropped by 2.94 per cent year-on-year in the July-September quarter of the fiscal.

Tipu Munshi informed the meeting that the slowdown in exports was seasonal due to recession in major economies and the dragging US-China trade war.

He hoped that the exports would recover soon as the RMG exporters had already been given fresh incentives.

On November 3, the Centre for Policy Dialogue in a report warned that the macroeconomic stability became weaker as key economic indicators including revenue mobilisation, and exports were under mounting pressure that might slowdown the economy.

‘The macro economy is under severe pressure and we did not see in last 10 years,’ said CPD distinguished fellow Debapriya Bhattacharya at the function. 

Government’s policymakers said in July-August imports fell by 2.3 per cent to $8.62 billion compared to $8.83 billion in the same period of the last fiscal.

They said that they discussed the proposals mooted by the agriculture ministry to increase the subsidies but took no decisions.

The next council meeting is due in March.

News Courtesy: www.newagebd.net