"The tariff changes in the final budget will definitely hurt the country's industrial sector. The strong import bias of the budget will encourage importers at the cost of local industries," said the editorial of ICC-B quarterly News Bulletin released yesterday.

The editorial said in formulating the tariff rationalisation, the budget for 2007-08 seems to have followed the trade policy prescriptions, which would not hold good for the growth and development of the country as a whole. Neither would it help mobilize internal resources, it added.

The national budget is not merely a document containing the government's proposals and projections about revenue earnings and expenditure. It is supposed to reflect the mission and vision of the government and aspirations of the people, it said.

In a least developed country like Bangladesh, donors' prescription at times overshadows the national priorities in formulating budget due to heavy dependence on external assistance for development programme, the News Bulletin said.

However, many such provisions may be seen as a standard prescription for the benefit of the country but may not be practical for implementation in a given geographical and social conditions. This may have been reflected in this year's budget as well when one considers the tariff measures, the editorial said.

The editorial said, "While the decision to withdraw duty on capital machinery and computer accessories in the approved budget are commendable; but on the other hand significant duty reduction for the telecommunication sector seems to have little justification in comparison to the industrial sector as a whole."

The business leaders of ICC-B welcomed the proposal for increasing power generation by 2300 MW over the next 3 years to help improve supply against projected demand.

But considering the projected GDP growth the demand by 2010 for power would be much more than that estimated by the government, it said, adding, "Therefore, a realistic projection of future demand for electricity should be done on a priority basis. At the same time, the government should encourage more private investment in this sector."

The editorial said the budget has a strong bias towards rural economy. Provisions for financial assistance and increased subsidy for agriculture, diesel and fertilizer as well as for research and development in the agricultural sector are clear indications of the government's aim at poverty reduction.

Fifty-seven percent of the overall budget has been allocated to projects linked to poverty reduction. However, given the performances of the previous governments in implementation of development plans as well as the existing structural deficiencies in the rural areas, one may be skeptical about the achievement of basic budgetary goal-- poverty reduction, it said.

Different features of the budget, such as higher allocations for key sectors, changes made in income tax administration and also better safety net for the poor are welcome move.

Similarly, allocation of Tk 1 billion for SME Foundation and Tk 0.23 billion Trust Fund for industrial loans to small entrepreneurs are also commendable, the editorial went said.