Economy under pressure
One-time cash incentive for farmers, form bank Commission, CPD suggested
CPD fellow Dr Debapriya Bhattacharya speaking at a press briefing at the CIRDAP auditorium on next National budget on Tuesday.
Staff Reporter :
The Centre for Policy Dialogue (CPD) has recommended a one-time cash incentive to the farmers who became victims of low paddy prices.
CPD, a private think tank, made the recommendation at the launching ceremony in its latest report titled, "The State of Bangladesh's Economy and Budget Challenges," at the CIRDAP auditorium in Dhaka on Tuesday.
It also claimed that farmers faced loss of Tk 300 for per maund of paddy in this Boro harvesting season due to price havoc. "Each of the farmer should be given Tk 5,000 cash incentive to recoup their losses. Such a support will encourage the farmers to go for paddy production again," said Debapriya Bhattacharya, a distinguished fellow of CPD.
He said, a budgetary allocation of around Tk 9,100 crore may be required to provide cash incentives and it should be given to each of the 18.2 million farmers, who hold agricultural input assistance cards.
Analyzing the current state of macroeconomics, Debapriya Bhattacharya claimed that it is currently under pressure.
"Bangladesh's economy is now at its lowest ebb since the last 10 years," commented Debapriya adding that the shortfall of revenue, problems in the banking sector and pressure on the Taka-Dollar exchange rate are responsible for the current situation of the economy.
He cited that the pressure on macroeconomics will be eased if these problems are solved.
Debapriya Bhattacharya further noted that poor performance in revenue collection has hurt the government investment plan, compelling it to go for costly borrowing from savings tools.
Highlighting the ongoing banking crisis, he said, interest rate cut alone cannot solve the banking sector's problems. The government needs to ensure good governance at banks to overcome the crisis.
Debapriya Bhattacharya also renewed the call for a banking reform commission to address the prevailing vulnerable situation in the banking sector.
"The banking sector is passing a severe crisis moment due to large loan scandals and soaring non-performing loans. Even, the amount of defaulted loans increased by Tk 17,000 crore during the last one quarter, showing the real vulnerabilities of banking sector. So, the government should immediately form a banking commission to address the problem," he suggested.
Defaulted loans soared to Tk 110,874 crore as of March this year, according to a Bangladesh Bank data.
Debapriya Bhattacharya mentioned that next budget is 'very important' for Awami League Government for three reasons - implementation of Awami League's election manifesto, achievement of Sustainable Development Goals and the 7th five-year plan.
He also opposed the budgetary measure to whiten the back money.
Presenting the key note, Toufiqul Islam Khan, a senior research fellow at CPD said that this year's Boro harvest has not been a pleasant experience for the farmers due to unexpected low prices during the harvest season - against a high cost of production and shortage of buyers on the market.
Given the situation, the government may consider providing a one-time cash incentive of Tk 5,000 to the farmers to sustain their production in the absence of crop insurance.
He opined that the low prices of paddy may be due to increased rice imports.
"The authorities should have been more vigilant about the quantity of imported rice and its impact on the domestic market," said Toufiqul.