Waseqa urges businesses to use capital market for fund collection

State Minister for Finance Waseqa Ayesha Khan has encouraged businesses to collect funds from the country’s capital market to ease the pressure on the banking sector.

“I wonder why private sector credit flow from the capital market is not discussed much,” she said at a pre-budget discussion on Tuesday.

Economists in the discussion have attributed poor revenue collection as a major failure of the government to manage other economic indicators, increase allocation and increase the size of the national budget.

The Institute of Cost and Management Accountants of Bangladesh (ICMAB) organised the discussion at a Dhaka hotel.

Professor Dr Mohammad Farashuddin, former governor to the Bangladesh Bank, Dr Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI), Dr Mizanur Rahman, professor (LPR), department of marketing, faculty of business studies, University of Dhaka Mahbubul Alam, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Dr Masrur Reaz, chairman and founder of the Policy Exchange Bangladesh, Md Amin Helaly, senior vice president of FBCCI, Md Munir Hossain, vice president of FBCCI, Professor Dr Muhammad Shahadat Hossain Siddique, department of economics, university of Dhaka, Syed Almas Kabir, former president of Bangladesh Association of Software and Information Services (BASIS), and Mustafa Kamal Mohiuddin, chairman of Magura Group, were discussants in the programme.

Arif Khan, past president and present council member of ICMAB, moderated the program, while Dr. Salim Uddin, president of ICMAB, delivered the welcome speech.

Other discussants from ICMAB were past presidents Mohammad Salim, Md Abdur Rahman Khan, and council members Md Kausar Alam, Zia Uddin, and Dr. Syed AA Mamun.

Ms Ayesha Khan said the maximum use of the budget allocation is not visible while proposals are piled up for higher budget allocation.

In the upcoming budget, the government would focus on ensuring food security at low cost, expanding the social safety net, agricultural mechanisation, continuing subsidies, financing the productive sector, addressing climate change issues and continuing the price adjustment measures of energy in the international market.

She said market should determine the exchange rates as per the market's economic trend.

“I don’t believe interest rate hikes trigger non-performing loans, as it’s related to financial sector management,” she added.

She said NPL was even higher under the 9/6 interest rate regime.

She vowed to recommend allocations for electronic fiscal devices in the budget.

Dr Farashuddin Ahmed said contractionary monetary policy is a suicidal measure for the economy, fueling inflation and unemployment.

He said the government cannot increase the budget size due to poor revenue collection.

The ex-central bank governor underscored the need for the government to build a buffer stock of food grains to ensure fair prices for farmers and consumers, curb the siphoning of money, ensure export receipts, introduce single exchange rates, and reduce the difference between forex exchanges to Tk 2/3 with a curb market.

He said the government should borrow from saving certificates, not from the banking system.

Dr Mansur recommended taming inflation, stabilising exchange rates, and focusing on foreign exchange reserves.

“It’s an unpleasant reality that the government would have to limit the budget size, given the poor domestic revenue mobilisation,” he added.

The FBCCI president pointed out several fiscal measures hindering businesses, including tax return submission every month, a lack of automation, and a higher cost of logistics.

The ICMAB president proposed budgetary measures to contain inflation.

Dr Masrur Reaz recommended a faster policy response by the government to face economic challenges.

Former ICAB president and also additional secretary of the Ministry of Finance, Abdur Rahman, said intergeneration equity might be broken if the government increases the size of the budget without sufficient domestic revenue.

Syed Almas Kabir proposed to continue the tax break for the ICT sector.

Professor Mizanur Rahman recommended higher allocations for education and skill development.

Professor Shahadat Hossain suggested avoiding printing money as it imposes a burden on citizens.

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