Budget should prioritise investment and employment

At present, the economy is going through a difficult time. Soaring inflation has placed immense pressure on people, while industries are grappling with rising production costs and operational challenges. Amid this situation, we hope that the new budget will be both people-centric and business-friendly.

The agriculture sector is extremely important for our country. During times of high inflation, if we cannot increase internal food production and supply, inflation will not ease. Reducing inflation is not possible through imports alone — we must enhance domestic food production. Therefore, the government must increase allocations to the agricultural sector, not just through subsidies, but by supporting modernisation projects. 

It should also facilitate agro-processing initiatives to ensure better marketing of farmers' products. Additionally, spending on education and health must be increased to provide relief to the general public.

Simultaneously, focus should shift from costly megaprojects to smaller, labour-intensive ones. These are easier to implement, deliver faster results, and create widespread employment opportunities. Projects that remain stalled due to poor implementation serve little purpose and waste valuable resources.

The business community is under considerable stress due to rising production costs. The budget should reflect all possible measures to reduce production costs in factories. If costs come down, consumers will benefit, and businesses will remain sustainable. We also expect policy consistency and tax reductions to protect local industries.

Currently, Bangladesh's tax-to-GDP ratio is just 7.5%. If the government wants to increase revenue, there are effective alternatives to raising tax rates. The budget should focus on expanding the tax net while reducing rates in various sectors. High tax rates often encourage evasion rather than compliance.

We are concerned that heavy tax burdens may be imposed on import-substitute industries. We believe that the government should reconsider this approach and instead reduce VAT and other taxes on both the import-substitute sector and essential food products. Such measures would help protect and encourage the growth of local industries, reduce reliance on imports, and ensure more affordable prices for consumers. 

The government should avoid tax hikes on electronics, textiles and plastic industries. If this happens, these sectors — and the broader economy — will suffer. Likewise, possible increases in corporate and turnover taxes could harm businesses and have long-term negative consequences for economic growth.

One of the most pressing issues for industrialists is the lack of uninterrupted energy supply, particularly gas. Despite rising energy prices in recent years, industries continue to struggle with shortages. The budget must include concrete measures to ensure a reliable gas supply to keep factories running.

High bank interest rates remain a major obstacle to investment, slowing down capital flows. As inflation has shown a slight downward trend in recent months, there is scope to reduce interest rates. We expect a clear and specific announcement on this in the budget. Furthermore, the government should reduce its own borrowing to allow for more credit availability in the private sector. Greater access to finance will encourage entrepreneurs to invest, leading to significant job creation.

To reduce business costs, the budget should support improvements in port capacity, customs efficiency, and reductions in shipping and transportation expenses. Special tax incentives should also be introduced for new industries to attract fresh entrepreneurs and boost investment.

Moreover, investors make decisions based on factors such as law and order, foreign exchange reserves, GDP growth, and good governance in the banking sector. The budget must offer clear policy direction on these critical issues.

While the government is rightly offering incentives to attract foreign investment, we also expect support for domestic entrepreneurs. Encouraging homegrown investment and innovation is essential for inclusive and sustainable economic growth.

However, we hope this year's budget will be truly inclusive and business-friendly — one that strengthens the investment environment and accelerates job creation.

Ahsan Khan Chowdhury is the chairman and CEO of PRAN-RFL Group