Essay 3

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Offline zafrin.eng

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Essay 3
« on: March 25, 2018, 02:53:03 PM »
Private sector  investment: Status and suggetions
The country’s economic growth and development strongly depends on private sector. Private sector plays a huge role in improving the living standards of people. The private investment has been stagnant for past few years in BD.
Figure 2.2: Private investment (% of GDP) in last 10 years
Source: Calculated from BBS Note: p denotes provisional estimate.

The figure shows the current scenario of the Private sector investment in Bangladesh. The major reasons for the stagnant position in private sector invests are higher interest rate of bank loan, political unrest, lack of sufficient electricity, gas , sustainable infrastructure, lack of good governance, lack of transparency in various field etc.
By overcoming these pitfalls the next budget is likely to envisage a huge private sector investment in the economy, a gap of above Tk 80,000 crore or nearly 22 per cent growth from the poor investment made in the outgoing financial year. It will raise the contribution of private sector investment to gross domestic product to 23.3 per cent in the next 2016-17 financial year against 21.78 per cent in the revised estimate for the outgoing 2015-16 financial year, officials concerned said.
The national economy seems to be trapped under a 6.0 per cent growth due mainly to lack of investment. Investment is not accelerating due to lack of proper policy and investment promotion strategies,” Debapriya Bhattacharya, a distinguished fellow of Center for Policy Dialogue (CPD), told The New Nation on recently . He said, Bangladesh targets a GDP growth of 8 per cent in its Seventh Five Year Plan. If the country wants to achieve the target, the share of investment in value needs to be accelerated to 32.5 per cent from current 28 per cent.  “We cannot overcome such sluggish investment scenario unless investors are being facilitated by planned way. A strategic plan with various fiscal incentives for the investors is a must to gear up the investment scenario further,” he noted. Debapriya Bhattacharya further said the investors need supportive policies along with congenial political environment for the security and return of their investment.
Former Bangladesh Bank governor Mohammed Farashuddin at a workshop of Economic Reporters’ Forum in the capital said that the responsibility rested with the government to help boost private sector investment, as the issue required pro-business and investment-minded economic policies. He insisted on lowering interest rates by the private sector banks so that investors could feel encouraged to park their fund to propel growth in the private sector business and subsequently contribute to the growth of the national economy.