Now it is time to end export incentives

According to projections from the central bank and the IMF, the dollar rate is expected to remain close to Tk117. Therefore, I think the need to provide separate incentives for exports is no longer necessary. Previously, exporters received a dollar rate of Tk84-Tk85, but now they will receive a much higher amount. Hence, it is time to withdraw incentives from this sector.

It is not possible to control inflation solely through contractionary monetary policy; coordination with fiscal and tariff policies is also necessary. Inflation persists due to the lack of coordination among these three policies.

Our non-food inflation has decreased significantly, but food inflation remains uncontrolled. One reason for this is that although we have implemented a contractionary monetary policy, we have not reduced import duties on essential food and non-food items, such as fuel, edible oil, fertiliser, and poultry feed raw materials.

To mitigate inflation, tariffs on these items should be reduced to zero or significantly. While this may slightly reduce revenue, it is necessary for the greater good.

The NBR needs to enhance direct tax collection to boost revenue. Additionally, reducing or discontinuing export incentives will decrease government expenditure.

Furthermore, the government should decrease expenditure to mitigate inflation. However, the government has already reduced the allocation of the Annual Development Programme (ADP). We have increased the policy rate as part of the contractionary monetary policy. If fiscal policy and tariff policy are coordinated with this, a decrease in inflation is anticipated.

Binayak Sen is the director general of the Bangladesh Institute of Development Studies (BIDS)