Daily Bangla Times: The prices of essentials are on the rise in domestic markets compared to those in overseas markets due to market manipulation by a group of businesses and absence of internal governance, observed the Centre for Policy Dialogue at a programme on Monday.

The observation came at an event titled ‘CPD’s Recommendations for the National Budget FY2023-24 Weathering the Storm, Containing the Risks’ at its office’.

The Russia-Ukraine war can no longer be used as an excuse for price hike of such commodities, the local think tank said.

‘There are a number of essential items such as rice, sugar, soya bean oil and beef that are more expensive in Bangladesh than other developing countries,’ said CPD executive director Fahmida Khatun. 

‘Many families, including minimum wage earners across all sectors, are struggling to meet their need. Many are excluding meat and fish from their menus.’

An average monthly food expense now for a family of four in Dhaka is about Tk 22,664, which was Tk 18,115 in the previous year, said the researcher.

The prices of essentials don’t fall in Bangladesh even when they do in overseas markets, and prices of some food items have remained costlier than those in the global markets, she pointed out.

Fahmida stated that the budget could be the weapon to deal with the situation, adding that at least 28 imported essential food items currently faced high tax.

‘Against the backdrop of soaring inflation, the National Board of Revenue should reduce duties and taxes both at import and domestic levels in order to provide some respite to consumers with low and limited incomes,’ she said.

The CPD executive director suggested that the government should take strong steps in the next budget to recover economy and restore macroeconomic stability.

‘The minimum wage board should consider a minimum wage hike by 5 per cent in all industries so workers may at least afford to buy basic food items,’ she said.

Fahmida recommended that the government set higher targets for food-grain procurement and food distribution programmes in FY24.

‘The government should provide additional support for subsidised credit programmes and continue providing stimulus for agricultural sector – both crop and non-crop – and to small and medium enterprises for helping them survive during the next financial year,’ according to Fahmida.

The researcher observed that the socio-economic indicators of the country became very weak as revenue collection in the first six months of the financial year witnessed negative growth; as a result a revenue deficit might stand at Tk 70,000 for FY23.

Besides, the implementation of annual development programme has not increased to the desired level and the government is restricting the import of certain products to save foreign exchange, she mentioned.  

The CPD official explained that the net foreign financing came down, with the government borrowing heavily from the banking system while many banks were unable to lend due to liquidity crunch.

The currency circulation outside the bank is also increasing but people’s purchasing power is decreasing, she said.

The power and energy sector is the government’s biggest subsidy expenditure, which has been revised upward to Tk 23,000 in FY23.

A large part of subsidy burden is caused by excess power generation capacity and resultant capacity payment to independent power producers, Fahmida said, suggesting that budget allocation should be provided on a priority basis for domestic gas exploration.

The government needs to take measures such as reduction of customs duty and VAT on renewable energy-related technologies and types of machinery, according to the expert.

CPD research director Khondaker Golam Moazzem and senior research fellow Towfiqul Islam Khan also spoke at the event.