Govt targets 8pc GDP growth by 2020

The seventh five-year plan that will set out to cross the milestone of 8 percent in gross domestic product growth got the approval from Prime Minister Sheikh Hasina yesterday.

“This flagship document will be the bridge between the country's present and the future,” Planning Minister AHM Mustafa Kamal told reporters after a meeting of the National Economic Council with the prime minister in chair.

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To hit 8 percent GDP growth, the plan estimates that investment of Tk 31.9 lakh crore will be required, of which 77.3 percent will come from the private sector.

The government will invest Tk 7.25 lakh crore and the private sector Tk 24.65 lakh crore, as per the estimate.

Some 90.4 percent of the total investment requirement will come from domestic sources.

The plan, which will start from this year and wrap up in fiscal 2019-20, estimates that GDP growth will hit 7 percent in fiscal 2015-16.

It will cross the 8-percent mark in the last year of the plan, with the average GDP growth in the five years coming to 7.4 percent. 

Infrastructure got much attention in the plan, with the government aiming to complete the Padma bridge and the 26-kilometre Dhaka elevated expressway during its time-span.

About 856 kilometres of new rail tracks will be laid and electricity from the Rooppur nuclear power plant generated. The use of waterways and rail will be encouraged for transportation of goods, as these are environment-friendly and cost-effective.

Building a deep-sea port and the Payra seaport, and the liquefied natural gas terminal will be given emphasis under the plan. For investment, getting energy easily is a precondition.

In the next five years, 12,584 megawatts of electricity will be generated, 61 percent of which will come from the public sector and 39 percent from private sector.

Electricity will be produced from the big public sector plants instead of signing agreements with the new quick rental ones.

In future, the energy demand for household consumption will be met from coal and liquefied natural gas.

The contribution of agriculture to the GDP will be brought down to 12.99 percent in 2020 from 16.1 percent in 2014. The industries' share will increase from 27.6 percent to 33 percent in 2020, while that of the services sector will drop to 54.1 percent from the existing 56.3 percent.

In the new five-year plan, the target for new employment generation has been set at 1.29 crore.

Kamal said the new plan will achieve its target of GDP growth by creating huge employment, and at the same time, steps will be taken to ensure that income inequality does not widen.

However, the targets set out in the plan came under criticism at the National Economic Council meeting yesterday, according to a planning ministry official.

Finance Minister AMA Muhith criticised the 16.1 percent revenue-GDP target. “There is no way of achieving it,” he said at the meeting.

In the last six years, the revenue-GDP ratio increased only 3 percent. “How can it grow by 5 percent in five years?”

He also said the target of bringing in $9 billion in foreign direct investment by 2020 is impractical and unrealistic. The FDI at present is $1.5 billion, he said.

Hoping to increase foreign assistance to 3 percent of the GDP is also unrealistic, Muhith said, adding that it can be 2 percent of GDP at best.

The planning ministry official said the prime minister also made some criticism about the plan document. She said it used some old data, and instructed using updated information before releasing it.

Hasina said the document has been prepared in an academic style and does not convey a political philosophy.

Subsequently, a committee has been formed, which will be led by Kamal and include the cabinet secretary and other concerned secretaries, to address the observations made in the meeting.

The committee will soon incorporate the suggestions and release the document.