Govt considering alternative to reduce bank loan dependency

Finance Minister Amir Khasru Mahmud Chowdhury has stated that the government is seeking alternative financing paths to reduce its dependency on bank loans. He noted that due to the debt and financial pressures left behind by the previous administration, this year's budget cannot be called "perfect."

He made these remarks on Sunday (June 21) at a budget dialogue organized by the Center for Policy Dialogue (CPD) in Gulshan, Dhaka.

The Finance Minister explained that there are various challenges to implementing the current budget. The tax-to-GDP ratio remains unsatisfactory, and at the same time, the global flow of foreign loans has decreased, impacting the country's economy.

He revealed that the previous government left behind a massive amount of financial liabilities. In the power sector alone, there are outstanding bills amounting to nearly 50,000 crore BDT. Additionally, the ongoing crisis in the Middle East has driven up costs, requiring a fresh evaluation of the overall economic structure.

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Regarding the National Board of Revenue (NBR), the Finance Minister announced that tax experts will be integrated into NBR's policy-making division. Necessary reforms will be introduced to make the revenue collection system more effective and modern.

He emphasized the need to build a cultural mindset where paying taxes is viewed as a positive civic responsibility. He added that bond facilities for exporters will be simplified, and alternative tax incentives are also under consideration.

Addressing budget allocations for the social sector, Amir Khasru Mahmud Chowdhury stated that 2% of the total budget has been allocated to the education sector in the current fiscal plan, with a long-term goal of increasing it to 5%. Similarly, there are plans to gradually raise the health sector allocation to 5% as well.

"There is no alternative to increasing investment in health and education to ensure sustainable development," he concluded. "These two sectors will be given the highest priority to develop a skilled workforce."