Bangladesh is sliding towards an ‘incomeless employment’ as real income of working class people has declined.
Analysing the state of the Bangladesh Economy in the fiscal year of 2017-18, Centre for Policy Dialogue (CPD) on Tuesday said this.
Dr Debapriya Bhattacharya, distinguished fellow of CPD came up with the remark during a programme in the city presenting CPD’s recommendations for fiscal 2018-19 budget.
He said though employment generation marked some increase in FY2017, the real income has declined.
“Female workers and rural workers are facing more decline in their real monthly income while the unemployment rate among the youth with higher education is increasing”, he said adding that, regional discrimination is also there as the decline is higher among the people from North Bengal and South-East Bengal.
According to CPD report, the real monthly income of female suffered 3.8 per cent erosion, while that of man suffered 1.9 per cent erosion, and in urban area, male workers monthly income increased 0.9 per cent while in rural area male workers face 4.1 per cent erosion.
More than one-third of the total youth labour force with higher education remained unemployed, according to CPD.
Dr Debapriya also termed the current state of banking sector as an ominous sign for the country’s economy.
He said, a handicapped banking system is building up.
Fearing the possibility of money laundering before the upcoming election, Debapriya said, the banking sector of Bangladesh has been plagued by financial scams, non-performing loans, inefficiency, and slack monitoring and supervision.
“Every time before election, the remittance increases but more money gets laundered”, he said adding that money laundering happens through banking sector, unstable capital market and high import payments.
“As institutional investors like banks play a significant role in controlling the capital market, proper monitoring should be there”, said Dr Khondaker Golam Moazzem, CPD Research Director.
In the analytical presentation, CPD urged the government to design the budget for stable macro-economy.
The organization also recommended to increase allocation for social security and to keep Rohingya crisis in mind while preparing the budget.
According to CPD, estimated 1.1 billion US$ will be required to cover the expenditure for the Rohingya on account of food security, sanitation, shelter, site management and health. Information on the flow of international fund, the usages of the fund for Ronghyas should be made readily available, it said.
Transparency in the allocation of budget, at the ministerial level, in view of the Rohingya crisis, should be ensured, urged CDP in the recommendation.
According to the think tank, Bangladesh Bank must pursue a cautious monetary policy in the coming months, the central bank should consider discouraging imports of consumer and luxurious commodities by raising L/C margins for import, and the budget for FY2019 should consider raising the tax-free income ceiling to Tk 3 lakhs in order to provide respite to lower middle income households.
It also recommended that government should consider reducing the personal income tax rate for the first slab to 7.5 per cent from the prevailing rate of 10 per cent, the adjustments of corporate tax rates should be done in a staggered way over the medium term in order to absorb any revenue shock.
CPD has also come up with some recommendations in the run-up to the election. According to them, independent and rigorous economy-wide analyses should be conducted for all types of reforms, emphasise should be given on timely implementation of VAT and SD Act 2012, establishing a Public Expenditure Review Commission for ensuring accuracy of cost of estimation of public investment projects, considering establishment of a permanent Local Government (Finance) Commission towards effective devolution of power and introduction of appropriate financing modalities for local government.
The speakers stressed on looking at the qualitative result of GDP growth and how the increasing GDP is having its impact on general people’s lives.
Among others, CPD Distinguished Fellow, Professor Mustafizur Rahman, and its Executive Director, Dr Fahmida Khatun, also spoke in the occasion while its Research Fellow, Towfiqul Islam Khan gave the presentation.