The Ministry of Finance has undertaken a package programme to properly implement the budget overcoming seven major economic challenges it detected for the new fiscal year beginning on July 1. They have inferred the broad-based economic challenges from the proposed budget for 2007-08, especially the finance adviser’s statement, and worked out huge tasks to be accomplished for overcoming the challenges.

The seven challenges are keeping macroeconomic stability, accelerating economic growth, keeping inflation at a tolerable level, removing barriers to private sector growth, reducing poverty further, bringing about income equity of regions and classes and guaranteeing food security.

Officials concerned of each ministry and implementing agency would sit on a regular basis to review the implementation of development projects and report back to higher authorities. There is no mechanism in the current budget implementation process to evaluate the actual output of the money spent rather than making a spending report. The finance and planning ministry, as coordinating point of fund release and evaluation of projects, would also review the budget implementation process from time to time.

In its defined course of action, the finance ministry listed 10 steps in the light of the budget speech to keep macroeconomic stability in conformity with the philosophy of multilateral lending agencies. The steps are transformation of three nationalised commercial banks into public limited companies, amendment to the Bank Companies’ Act 1991, sharpening the money laundering prevention act, listing of telecommunications and power sector companies and state-owned energy companies, deficit financing through issuance of medium and long-term bonds, amendment to policies on private fund and insurance fund, shouldering liabilities of Bangladesh Petroleum Corporation, zero tariff on edible oil and lentils, withdrawal of duties on essential items and restructuring of existing tariff structure.

The highest number of steps has been stated for accelerating the growth of the private sector. Some of the 28 steps include renovation of Chittagong Port, implementation deep sea port project, handing over six land ports to private sector, amendments to anti-hoarding law and industrial insurance rules, simplification of tax collection system and increased allocation for road and railway maintenance.

The ways and means for keeping inflation in check, as identified as number three of economic challenges, have already been stated in the measures such as proposal for setting up of four wholesale markets around Dhaka city, tariff reduction and strengthening of BDR-run ‘dal-bhat’ programme.