Govt aims to restore business confidence, revive economy in one month

The interim government is taking initiatives to revive the fragmented economy by restoring subdued business confidence within the next month, officials at the finance ministry say.

To achieve this, the authorities will launch a campaign to eliminate wastage and wasteful government spending, curb corruption, and combat money laundering.

Remittance inflows have already begun to rise as expatriates express growing confidence in the interim administration headed by Professor Muhammad Yunus.

Policymakers are optimistic about boosting revenue collection by tackling corruption and ensuring a stable business environment.

However, the officials remain cautious about prospects for export growth, new investment, and job creation in the current financial year.

Several Finance Division officials, speaking on the condition of anonymity, told The Business Standard that remittances have increased following the fall of the Sheikh Hasina government amid a student uprising.

On Sunday alone, $166 million was received in remittances. However, businesses have not yet returned to normal operations, and banking transactions remain sluggish, leading to a significant drop in revenue collection in July.

Finance and Planning Adviser Salehuddin Ahmed told TBS on Sunday that his top priority is to accelerate the economy.

He stressed the importance of bringing transparency to government expenditure by curbing corruption and waste, increasing production in agriculture and industry, restoring order in the financial sector, and boosting revenue collection.

He noted that he has already issued instructions to the relevant departments and organisations.

A senior official from the finance ministry told TBS on Tuesday, “Currently, there is fear and panic among the public, including the business community. Within the next 15 days to a month, the government will clamp down on corruption in various government departments, including customs, to restore business confidence.

“Cost-pushing factors in business will be eliminated. The business sector, including banking, will become dynamic within a month. As a result, the entire economy will be fully functional in no more than a month.”

The official added that a conducive environment will be created for businesspeople to resume their activities, and that the revenue lost to corruption will be recovered. The government will work to motivate businesses.

He also pointed out that remittances have surged following the fall of Sheikh Hasina, due to the positive perception expatriates have of the current government.

Finally, he noted that the recovery of export income will largely depend on how successfully business confidence is restored.

Officials at the finance ministry say there has been a lot of damage to government assets in the uprising. Especially, the deployment of various law enforcement forces and their vehicles and infrastructure were damaged. Besides, many government buildings were vandalised and set on fire. Verbal instructions have been given to the ministries concerned by the Finance Division with full information about these losses.

Finance officials estimate that infrastructure renovation, machinery, and the replacement of damaged vehicles may cost around Tk10,000 crore. For the time being, the Finance Division has suggested meeting these losses with the money allocated to various sectors of the ministries concerned.

They said hundreds of projects that are not important in the annual development programme can be cut and allocated to these sectors if the expected level of revenue is not collected.

In the budget of the current financial year, there is a total allocation of Tk6,255 crore in favour of the finance ministry, out of which the amount of allocation for the unexpected sector is Tk4,000 crore, with which the officials of the Finance Division think that it is not possible to overcome the losses caused by the slowdown.

However, the policymakers at the Finance Division feel that it will be possible to overcome the impact of budget implementation at the beginning of the financial year.

They say there will be no corruption, wastage, or wasteful expenditure in public expenditures. It will be possible to meet many needs with the savings that will be made.

As a result, the budget deficit will not increase even if revenue income is slightly lower. However, austerity measures will also be extended if revenue collection falls too much.

They said that the Finance Division will be in a strong position to keep the budget deficit within limits.

Senior officials at the Finance Division expressed that they do not anticipate significant investment in the current climate. Political unrest and diminished business confidence, coupled with high inflation, are expected to naturally deter new investment.

They noted that when inflation surged in various European countries and the United States due to the Ukraine-Russia war, investment in those regions also stalled.

However, as inflation in these countries is now declining, investment is beginning to pick up.