The lessons from the pitfalls of Indian economic reform and its electoral consequences have made the BNP-led alliance government cautious and motivated it to "draw up a caring reform in the next budget," Finance and Planning Minister M Saifur Rahman said yesterday.

At a pre-budget briefing, Saifur told the Economic Reporters Forum (ERF) that the Indian reform benefited but a few, helping them get richer. "But, we have to pursue a reform which ensures that resources go to all sections of people rather than get accumulated in a few people's hands."

"The main focus would be on reduction of poverty through generating employment, mainly in the rural areas," he told the meeting.

The reform policy will be consistent with the PRSP (Poverty Reduction Strategy Paper), three-year rolling plan and a midterm economic development plan up to 2008 to ultimately achieve the Millennium Development Goals by the year 2015.

The planned midterm financial structure up to 2008, which will include a guideline for resource mobilisation as well as expenditure, will help ministries and other government bodies to take policy decisions in advance, said saifur, who is going to place his 10th national budget on June 10.

The minister said the budget would lay stress on decentralisation to stop unethical practice by the local government bodies as well as to accelerate their activities. Under the drive, some powers of the ministries will be gradually devolved to city corporations and district, upazila and union parishads, he elaborated.

Credit flow to villages will also be increased, he said, adding the budget will have instructions and directions for banks to sanction loans on the basis of entrepreneurial initiatives and dynamism rather than collateral requirements.

Under the 'caring and village-centric reform', the government will take special steps to provide financial assistance to agro-based industries, the finance minister said. Irrigation will get a range of supports, including subsidy, canal digging and construction of embankment, Saifur added.

According to his plan, the Bangladesh Agricultural Development Corporation (BADC) will be transformed into a Seed Corporation and adequate funds provided to strengthen its activities.

The minister also announced that the safety net programme, like old age allowance and widow allowance, would be further expanded.

The budget will also attach priority to infrastructure development in rural areas in order to facilitate farmers in marketing their produces better. "On the priority list for budget allocations, railways and inland water transport will come next to the agriculture sector," Saifur said.

On law and order and extortion situations, the minister said the government had already taken measures to strengthen the police force and budget allocation would also be increased to make police a more effective instrument for providing security to citizens. He believes, "Economic development cannot sustain without proper security."

Saifur also said some institutional reforms would take place in the new policies to ensure transparency and accountability as well as optimum utilisation of the scarce resources.

Finance Secretary Zakir Ahmed Khan and National Board of Revenue Chairman Khairuzzaman Chowdhury were also present at the meeting held at the finance ministry conference room.