Finance Minister AMA Muhith yesterday signalled a further hike in fuel and power prices in the next budget to reduce the subsidy burden on the government.

Muhith sat at a pre-budget meeting with the editors and other senior journalists of the print and electronic media at his ministry.

“A price adjustment is a political decision of the government but the timing will be fixed after considering political environment, summer and irrigation season,” said Muhith, when asked about the timing.

The government had to borrow from the banking system to subsidise fuel oils, which eventually increased inflation, Muhith said.

“Subsidy cuts will now tackle that,” he said.

The minister replied to the editors' queries on amnesty for black money, reducing tax on newsprint, and the World Bank's corruption report about the Padma bridge project.

In the current fiscal year, the government hiked fuel and power prices several times, resulting in inflation, especially non-food inflation reaching double digits.

But the finance minister told the editors that subsidy cuts would tame inflation and it may come down to 7.5 percent next year.

Inflation comes down to the single digit level not only because of cuts in subsidy but also due to an improved supply situation and an increase in income, Muhith said.

About amnesty for black money in the next budget, Muhith said the government has not decided on the matter yet.

On foreign aid, Muhith said the government failed to utilise foreign aid due to its inefficiency.

“Though commitment increased, we have not been able to spend the fund. It is a failure,” Muhith said.

In the next budget, steps will be taken to increase efficiency, he said.

Responding to the editors' queries about good governance and decentralisation of administration, the minister admitted there is politicisation in the administration.

“Personally I feel that finding a solution to this problem [politicisation] is difficult,” he said.

“Change is not possible without changing the political atmosphere,” Muhith said.

On public private partnership, the minister said it is not true that nothing has been done for implementing PPP projects.

He said the power projects have been implemented in line with the PPP model. Various flyover projects are being implemented through PPP initiatives, according to the minister.

The editors strongly recommended lowering tax and duty on newsprint import.

Abdul Qayyum, joint editor of the Prothom Alo, said the cost of production of a copy of a daily newspaper is Tk 20 but it is sold at Tk 8. The cost cannot be recovered from advertisements alone, he said.

Newspapers pay 23.5 percent duty, VAT and advance income tax on newsprint imports. Qayyum proposed a waiver of 3 percent duty and 15 percent VAT on newsprint imports.

He urged the government to consider the recommendation, keeping in mind the media's social contribution.

To a question about US Secretary of State Hillary Clinton's comments regarding Grameen Bank, Muhith said he read about them in newspapers.

He said his position regarding the issue was clear. He dispelled the rumours about the government taking over the bank, and said: "It's a government enterprise, and it is clear who owns how much of the bank."

"Legally, the government of Bangladesh owns 25 percent of Grameen Bank," Muhith added.

Grameen Bank is not the only microcredit providing institution of the country, he said.

Muhith said there are around 3,000 microcredit institutions, many with good recovery rates.

“Microcredit is wonderful, but there is no point in fussing about it,” he said.

Reazuddin Ahmed, editor of the News Today, asked whether a sack full of money recovered by border guards will be included in the revenue earnings. A smiling finance minister said there is no scope to include it in the revenue.

Shah Husain Imam, associate editor of The Daily Star, suggested strengthening the Implementation Monitoring and Evaluation Department for the implementation of the annual development programme.

Moazzem Hossain, editor of The Finance Express; Syed Fahim Munaim, the chief executive officer and chief editor of Maasranga Television; Manzurul Ahsan Bulbul, chief editor of Baishakhi TV; Shykh Seraj, director of Channel i; and Khondaker Muniruzzaman, acting editor of the Dainik Sangbad, were also present.

The Daily Star/ Bangladesh/ 14th May 2012