Government is focusing on alternative financing: Finance Minister

The government is gradually moving towards alternative financing by reducing dependence on local banks through reforming the country's public finance structure, said Finance and Planning Minister Amir Khasru Mahmud Chowdhury.

He said this while speaking as the chief guest at the Budget Review Dialogue organized by the Center for Policy Dialogue (CPD) at the Lakeshore Hotel in Gulshan, the capital, on Sunday.

CPD Executive Director Fahmida Khatun presented the keynote address at the event.

The Finance Minister said that private sector investment is being hampered due to borrowing from local banks at high interest rates. Therefore, the government is focusing on market-based and alternative sources of financing by reducing dependence on bank loans.

He also said that he has been talking about the need to reduce dependence on bank loans for the past decade. The government's borrowing at high interest rates is also putting pressure on its ability to repay in the future.

Regarding the budget formulation, the Finance Minister said that this year's budget was prepared in just one and a half months of preparation, which usually takes six months. He claimed that huge outstanding bills were inherited from the previous government, including about Tk 500 crore in the electricity sector.

He said that a large part of the budget—about Tk 1,25,000 crore—will be spent on paying interest on loans, as a result of which the government's financial capacity or 'fiscal space' is being limited.

Regarding the social security program, he said that initiatives have been taken to deliver assistance directly to the accounts of beneficiaries through family cards, so that assistance is ensured without intermediaries.

Regarding the allocation for the education and health sectors, the Finance Minister said that about 2 percent of the GDP has been allocated for the education sector and there are plans to increase it to 5 percent in the future. In addition, importance is being given to skill development, reskilling and upskilling activities to create a skilled manpower.

Other speakers at the dialogue included Hossain Zillur Rahman, Executive Chairman of Power and Participation Research Center (PPRC), MA Razzak, Chairman of RAPID, Anwar-ul-Alam Chowdhury Parvez, President of Bangladesh Chamber of Industries, Enamul Haque Khan, Senior Vice President of BGMEA, and Montu Ghosh, President of Garments Workers Trade Union Center.