The government will focus on reforming the financial sector, including banks and the capital market, to stimulate private investment and job creation, said Finance Minister AHM Mustafa Kamal yesterday.
His comment came at a pre-budget discussion with the editors of print and electronic media, civil society and representatives of non-government organisations at the National Economic Council auditorium in the planning ministry.
“No wrongdoing will be allowed. We are taking steps to solve problems in the banking sector and there will be no spike in default loans,” he said after some editors expressed concern regarding the poor health of the banking sector.
The sector has been suffering because of several loan scams and rising non-performing loans for the last couple of years. The Centre for Policy Dialogue in its recent analysis showed that the NPL as a percentage of the GDP rose to 4.17 percent in 2018 from 3.76 percent a year ago.
“Ensuring discipline in banks and the capital market is a major challenge for our economy today,” said Bangladesh Pratidin Editor Naem Nizam at the event.
Responding to the concerns, Kamal said the government plans to take several measures. One of the plans is formulation of an insolvency law so that defaulters can get rid of from the trap of classified loans, he said.
Kamal said stock markets were one of the key drivers of an economy. Indicating that a vested group was manipulating the market, he said steps were being taken to address the problem.
“We do not want to be blamed repeatedly [for the downturn in stock prices],” he said.
At the discussion, the editors presented problems faced by the print and electronic media.
Matiur Rahman, editor and publisher of Bangla daily Prothom Alo, said the newspaper industry was facing problems worldwide, including in Bangladesh.
Readership is declining while revenue from advertisements is falling. There is also no scope to generate revenue online. On the other hand, operational costs of newspapers are rising for soaring import cost of newsprint and electricity bills, he added.
Rahman said the landed cost to import newsprint goes up to 31 percent, of which VAT was 15 percent.
He said the VAT on newsprint was lifted for newspapers in a 1991 law but the indirect tax was later slapped back on.
Rahman urged the government to withdraw the VAT on newsprint.
The veteran journalist said despite the fact that it has become sick, the newspaper industry faces 35 percent corporate tax, whereas the apparel industry, the biggest export earning sector, enjoys various benefits and its corporate tax rate is 10-12 percent.
Rahman demanded that the corporate tax on newspapers be 10-12 percent. He also appealed for a reduction in tax deducted at source to 2 percent from the present 9 percent.
Kamal promised to give some relief to the newspaper industry. “I will do at least something for the newspaper industry,” he said.
Daily Manabzamin Chief Editor Matiur Rahman Chowdhury said many people were facing troubles in getting savings certificates for investment. He demanded that the government clear ambiguity in this regard.
Kamal said there would be no change in interest rate on savings certificate. But the government will bring some changes so that none can take undue advantage.
Bishwo Shahitto Kendro Founder and Chief Executive Abdullah Abu Sayeed, Prime Minister’s Adviser on Media Affairs Iqbal Sobhan Chowdhury, former adviser to a caretaker government Rasheda K Choudhury, Financial Express Editor Shah Husain Imam, and Sushashoner Jonno Nagorik Secretary Badiul Alam Majumdar also spoke.