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Total aid in last fiscal year was $1475m: Kibria

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December 11, 2000 

Dhaka-- (UNB)- Leakage through over-invoicing for import and under-invoicing for export might have contributed to depletion of the country’s foreign exchange reserve despite constant growth of exports, says the Finance Minister.

Authorities concerned are taking tough measures to check such drainage, Shah AMS Kibria told economic reporters while exchanging views on the state of economy this (Sunday) evening.

The Finance Minister said because of liberalized foreign exchange management, banks have a reserve of over 700 million US dollars on hand to support external trade.

Bangladesh Bank governor Dr Mohammad Farashuddin, who also accompanied the minister at the iftar meeting at state guesthouse Padma, said forex reserve was US$ 1349 million as of Thursday, December 7, and increasing everyday.

“The reserve never went down as low as US$ 1.2 billion,” the governor emphatically said, refuting press reports.

In his over an hour’s presentation, Kibria, aided by the chiefs of related economic organs, projected a positive picture of major economic indicators to support his contention that economy is going well.

Exports, remittances, imports, revenues, agriculture and industry marked a growth while banks saw an expansion both in terms of deposits and credits.

On the other hand, government borrowings from banks also reduced significantly as the government took only Tk 925.62 crore from banking systems in July-November period of this fiscal. The figure was Tk 2065.56 crore during the same period last year.

“Restricted expansionary policy helped bring a positive change in the economy keeping inflation as low as 2.14,” he explained.

Revenue earnings grew by Tk 1181.55 crore or 21.62 per cent in July-November period over last year’s corresponding period.

Significant increase in import revenues, VAT and income tax led to the revenue growth in the first five months of the current fiscal year to Tk 6645.62 crore, he told the reporters.

Tk 1907.40 crore came from import tax, Tk 936.51 crore from VAT, both domestic and import levels, and Tk 1001.03 crore from income tax, marking an average 30 percent increase over last year’s performance.

“In next five years income tax and VAT would become the highest sources of revenue,” the Finance Minister hoped, stating that steps have been intensified to raise revenues from other areas.

Despite acreage declining, rice production grew to 23 million tons and wheat 1.8 million tons last year, which was 17.6 million and 1.3 million respectively in 1995-96, before the present government took over.

Rice production is projected to grow up to 23.7 million and wheat 2 million respectively this year.

Extended use of agriculture inputs, backed by the prudent policy of farm credit expansion, helped farmers boost their outputs, the Finance Minister said.

The Finance Minister, analysing the export performance, said significant increase in export of readymade garments and knitwear helped the export earnings go up to US$ 2.29 billion in July-October compared to US$ 1.75 billion in the same period last fiscal year.

Export of frozen foods and tea also rose, but leather, raw jute and jute goods declined.

In July-October of the current fiscal year, non-resident Bangladeshis remitted home US$ 601.75 million compared to US$ 566.44 million, registering a 6.23 per cent growth over the same period last fiscal.

Foreign aid flow in the pipeline also rose in the four years of the present government compared to that in four years of the previous government.

Total foreign aid in the pipeline stood at US$ 7654 million in four years of the present government, which figured US$ 6970 million in four years of the previous government, Kibria said giving comparative tallies of the two governments.

Total aid disbursed last fiscal year (1999-2000) was US$ 1475 million. A sum of $226 million has been disbursed between July and September this fiscal and the Finance Minister expected another $ 100 million by the end of December as committed aid is disbursed in phases spreading over years.

Deposits in banks rose by Tk 2649 crore in October than what was at the end of July this year. The central bank governor said deposits increased by 12 per cent in January-October and was expected to grow 16 per cent by December this year against 11 per cent growth in last calendar year.

Commercial banks gave a total of Tk 56945.19 crore advances in credit expansion July-October period of the fiscal year 2000-01.

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