Coordinated action needed to tackle inflation, jobs, revenue weakness: Sayema Haque Bidisha

First of all, as an economist, I would prefer to view the matter primarily from an economic perspective. There are, of course, many other challenges, but from an economic standpoint, at least three key priority areas clearly emerge.

First, we are facing a dual challenge. Although inflation has eased somewhat, it remains relatively high and there is still a risk of it rising again. At the same time, there is unemployment and poor private investment.

In other words, inflation must be controlled while private investment and employment need to increase – something that is extremely difficult. Measures taken to address one problem often create pressure on the other. Therefore, managing these two challenges in a coordinated manner will be the most significant policy test.

Second, one of our fundamental weaknesses is domestic resource mobilisation. For a long time, revenue collection has not increased to the desired level; it has not been possible to sustainably raise the tax-to-GDP ratio above 10%.

In this context, strengthening the revenue base is essential for sustainable development, infrastructure investment, and the expansion of social protection programmes. In particular, greater emphasis should be placed on direct taxes, expanding the tax net, and rationally restructuring personal income tax slabs.

This would not only increase revenue but also help reduce income inequality to some extent.

Third, special attention must be given to the interrelated areas of investment, employment, and poverty. Although growth has continued, the pace of job creation, especially in the manufacturing sector, has not been encouraging.

As a result, the relationship between growth and employment, or employment elasticity, is not functioning at the expected level. In this context, it is important to accelerate industrialisation while also strengthening the rural economy through small and medium enterprises (SMEs).

Alongside large industries, the SME sector can be a major source of broad-based employment generation.

In addition, in the context of LDC graduation, coordinated policies are needed to enhance competitiveness, reduce production costs, and diversify exports. At the same time, improving supply-side efficiency and ensuring proper coordination between demand and supply are critically important.

To ease the inflationary pressure on low-income urban populations, the coverage and allocation of open market sales, fair-price shops and social protection programmes should be expanded further. Without a strong social safety net, the burden of inflation falls directly on low-income groups and undermines progress in poverty reduction.

Managing these issues in a coordinated manner will require sound policy planning, effective resource management, and, above all, strong political commitment. It is expected that these priorities will be reflected in the upcoming budget.