The statement said export oriented and backward-linkage industries also stand to be hit by the increase of duties on raw materials and capital machinery. The statement said with such proposed tariff structure, it will be difficult to achieve the budget's expectation of seven percent GDP growth in 2007-08 as the industrial sector is due to be hurt.

The top leaders of the bodies urged the adviser to the Ministry of Finance to look into these serious issues and consider maintenance of status quo in respect of import duties on raw materials and capital machinery.

The signatories of the statement were Mahbubur Rahman, president of International Chamber of Commerce-Bangladesh (ICC-B), Latifur Rahman, president of Metropolitan Chamber of Commerce and Industry (MCCI), Masih Ul Karim, president of Foreign Investors' Chamber of Commerce and Industry (FICCI), Hossain Khaled, president of The Dhaka Chamber of Commerce and Industry (DCCI), Anwar-ul-Alam Chowdhury, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Md Fazlul Hoque, president of Bangladesh Knitwear Manufacturers & Exporters Association (BKMEA), Jahangir Alamin, acting president of Bangladesh Textile Mills Association (BTMA) and Saifuzzaman Chowdhury, president of Chittagong Chamber of Commerce and Industry (CCCI).

They in the statement said the imports of 400 items, mostly raw materials used in domestic industries, were denied the zero tariff facility and have been subjected to 10 percent tariff in the proposed budget. About 1,200 more raw materials and machinery have been subjected to 100 percent increase in tariff rates. Their tariffs have increased from five percent to 10 percent, in the proposed budget, the statement said.

They said import of all finished products has been given significant tariff concessions by withdrawing the four percent infrastructure development surcharge as well as reduction in supplementary duties.

"The proposed increase in duty of raw materials, intermediate inputs and capital machinery will affect domestic industries across the board, particularly the textile sector, which has been providing increasing backward-linkage facilities to the country's most dominant export products--readymade garments," the statement said.

"Similarly, exorbitant price escalation [by more than 100 percent] of steel products and its intermediate products in international market demand rationalisation of tariff [specific duty] to save local industries and the poor to have CI [corrugated iron] sheet prices within their reach," it added.

However, the leaders of eight bodies very much welcomed different features of the new budget like allocations for different sectors, financial assistance and subsidies to agriculture, the changes made in income tax administration and better safety-net for the poor.

It said 57 percent of the overall budget has been allocated to projects linked to poverty reduction. Similarly, the setting up of Tk 1 billion SME Fund (small and medium enterprise fund) and Tk 0.23 billion Trust Fund along with the provisions for help for research and development in the agriculture sector, allocation of Tk 7.5 billion in diesel subsidy and Tk15 billion in fertilizer subsidy for the firms are equally commendable, the statement said.

The joint statement said in formulating the tariff rationalisation, the budget seems to have followed the trade policy prescriptions, which remained on the table for quite sometime in the form of structural adjustment programme.

This prescription has been framed seemingly to enable the developing countries and the least developed countries (LDCs) to take advantage of the benefits of multilateral trade liberalisation because of limitations of their trading capacity and their trade policy framework marked by maintenance of high unbound tariffs.

"It is claimed that unbound tariffs create 'disincentives to enter international markets'," the statement said.

The statement said it is needless to mention that tariff policy reforms need to be pursued in the interest of the national economy keeping in mind that structural adjustment programmes are more often a reflection of the economic interests of the donors than the development priorities of aid receiving countries.

According to several studies, it said, trade liberalisation in itself does not automatically lead to growth and improved competitiveness. In fact, most of the developing countries have not been able to fully benefit from trade because they either lack tradable products or have limited capacity to tap market access opportunities.

"It is, therefore, extremely necessary to extend tariff concessions to local industries to help them grow and be competitive. In extending such help, it appears that different provisions proposed in the budget needs to be reconsidered in order to reconcile the interests of the industries with those of the consumers and the revenue income of the government," the statement concluded.