Changes in stimulus likely Economy will be back on track by year-end: Muhith

Finance Minister AMA Muhith has hinted at bringing about some changes
in the government' s stimulus package announced for some
recession-hit sectors, if necessary. While responding to queries in
parliament yesterday, the minister said the taskforce, formed with
an aim to weather out fallout from the financial crisis worldwide,
will review the package execution in its next meeting Thursday. On
investment sluggishness, Muhith pointed his finger at the global
economic meltdown. "We must admit that investment is not taking place
properly in many cases because of recession and we will not be able
to come out of the current situation easily," he told the House. The
present excess liquidity in banks shows that the country's economy is
not on track, he said. The minister figured out a Tk 347.62 billion
surplus liquidity in June 2009 , while it was Tk 129.89 billion in
the same month a year earlier. An uncertainty that loomed over the
investment scenario also led to a little slump in private credit
flow, he further informed lawmakers. "It's not because of our monetary
policy," Muhith told a questioner. The minister, however, shared his
hope with fellow Awami League lawmaker Abdul Mannan that a better
situation is at the year-end. "The investment situation may take a
positive turn once the government goes for PPP ( private-public
partnership) implementation," he said. In this context Muhith
identified power and energy constraint as the main impediment to
investment. The finance minister also placed a comparative study of
state-run and private banks with regard to deposits and disbursement
of loans, showing a poor performance by the state banks. Up to June
2009 , state bank deposits reached Tk 83 , 992.01 crore, while the
amount of loans was Tk 49 , 501.58 crore. The loan against deposit
in the state-run banks was 58.94 percent, Muhith told the
parliament. During the time, deposits in private banks stood at Tk
160 , 015.84 crore and loans Tk 138 , 776.39 crore, he said,
figuring out loans against deposits at 86.73 percent. He also
pointed to more transactions in private banks than in state banks
despite a higher interest the private banks charge. Quality and quick
modern services, diversified banking products and prompt disposal of
loan applications are some factors that contributed to the rise in
consumers in private banks, the minister said. On new pay scale,
Muhith said the recommendations the National Pay Commission put
forward in line with basic needs of life, inflation, social status
and ethical values of public servants will be implemented soon. He
also made it clear that salary of every public servant will be
raised. He further informed the House that currency notes inscribed
with the portrait of the Father of the Nation Bangabandhu Sheikh
Mujibur Rahman will hit the market soon. In reply to a query of AL
lawmaker Zobeda Khatun, the minister said a national tax tribunal is
on the card, which is likely to pick up district judges to run it.
"There is no plan to run mobile courts for raising the number of
income tax payers," he said, adding that the present number of such
tax payers is around 23 lakh and of them around seven lakh submit
their returns regularly. However, the minister pointed to the fact
that the government has already started survey work to net more
income tax payers. He turned down any speculations on appointment of
district judges for the tax appellate tribunal replacing the members
of National Board of Revenue. The minister also expressed his
firmness to draw a curtain on the culture of people's harassment,
building up a positive image of tax officials.