In the last financial year of the current government (2023-24), Finance Minister AHM Mustafa Kamal gave a budget of Tk 7 lakh 61 thousand 785 crore. Its size is 7 percent more than the previous financial year. Out of this, annual development program (ADP) expenditure has been estimated at 2 lakh 63 thousand crores. At the same time, the revenue estimate is Tk 5 lakh crore, the deficit amounting to Tk 2 lakh 61 thousand 785 crore, which is 5.2 percent of the deficit in Gross Domestic Product (GDP). The finance minister presented the budget at a time when the economy is facing high inflation on the one hand and imports on the other due to dollar-crisis, but there is no direction in the budget to reduce dollar reserves or inflation. Although there is a big expenditure plan in the budget, there is no realistic plan on how to increase the income. However, there are several positive steps in the proposed budget. Notable among which are – increasing the personal driving limit, increasing the allocation for social security programs and discouraging the import of some luxury goods, massive supplementary duty on imported goods, increasing the cost of registration of land-flats, taxes on the purchase of second cars will not affect low-income people. But it is necessary to think about how reasonable the provision of minimum tax of 2 thousand taka to every citizen to get government services. A day laborer also has to take government service, does he also have to pay tax of 2 thousand rupees?
Finance Minister talked about building Smart Bangladesh. Work is going on on four foundations to build Smart Bangladesh. These are Smart Citizen, Smart Economy, Smart Government and Smart Society. The government is working to make Bangladesh a smart Bangladesh of tomorrow, where every manpower will be smart, everyone will learn to do every work online, economy will be e-economy, in which complete financial management will be done on digital devices, our education, health, employability will be all through e-governance. Digital devices will be used in everything including e-education, e-health and by 2041 it will be possible and work is going on with that in mind. But there is no such reflection in the budget. This year’s budget also has less guidelines for employment creation. The finance minister’s announcement to raise private investment to 27 percent is also not realistic, economists think. A special allocation of Tk 100 crore has been kept in the next budget for research, innovation and development work to prepare the youth and youth as the driving force of building Smart Bangladesh.
Now it is important to see how those who think about society, politics and economy analyze this budget. As soon as you open the newspaper, you can see many comments for and against the budget, which is mostly political, mostly economic, and also a little social policy. CPD’s budget review says that on the one hand, the tax-free life expectancy has been increased to relieve the common people from the pressure of inflation, on the other hand, the minimum tax has been increased to 2 thousand rupees, those who do not have taxable income will also be covered by this tax, therefore the initiative is not morally right, but also logical. not The implementation of this budget is not possible in the current world context and internal obstacles, especially the two main goals of the budget – achieving 7.5 percent GDP growth and reducing inflation to 6 percent are not possible in any way. Remittances are on the decline, foreign exchange reserves are also on the decline, down by $29 billion, and there is a huge deficit in the power and fuel sectors. As a result, domestic production is severely disrupted, with public investment at 6.2 percent and private investment at 27.4 percent of GDP, how can this be possible? Despite the talk of imported inflation, prices of all commodities in the global market are now on the downward trend. So it is not right to impose inflation on it. There are many internal weaknesses in the country, such as fiscal structure, institutional and monetary policy, and lack of coordination between monetary policy and fiscal policy. Increasing the tax-free life limit from Tk 3 lakh to Tk 3.5 lakh is a ‘very good and timely’ initiative.
In the proposed budget for the next financial year 2023-24, a total of Tk 66 thousand 762 crore has been allocated for subsidy. Despite the pressure from the International Monetary Fund (IMF) to reduce subsidies, the Ministry of Finance is talking about the increase in the exchange rate of foreign currency against the rupee as one of the main reasons for the large increase in this allocation. The ‘Medium Term Macroeconomic Policy Statement’ is published by the Macroeconomics Division of the Ministry of Finance as a supporting publication during the presentation of the budget proposal for the next financial year. Using BPDB sources, it is said that if the dollar exchange rate increases by 1 taka in the next financial year, the amount of subsidy on electricity alone will have to increase to 743 crore 60 lakh taka. In addition to increase in subsidy expenditure due to devaluation of rupee, government project expenditure will also increase significantly. As many large government projects are dependent on imported goods, a rise in the dollar exchange rate can increase the cost of projects and further increase the government’s financial burden. Experts see its negative impact on the government’s revenue collection, the private sector has also been affected by the increase in the dollar exchange rate, the ministry fears that the devaluation of the rupee against major foreign currencies, including the dollar, will further increase the government’s debt burden. At the same time, it is going to have a serious and negative impact on both the income and expenditure of the government.
However, based on the analysis of the current dynamics of the economy, economists say, there is a strong fear that the debt and loan interest payment pressure will be much higher than the ministry’s projection in the coming days. This burden of foreign debt is gradually pressing down on the overall economy including reserves. According to the Finance Ministry report, efficient debt repayment management is essential to ensure financial stability and avoid liquidity crisis. However, the finance ministry expects it to remain within tolerable limits as a result of government efforts to diversify funding sources and build foreign exchange reserves. As capital (a record of total transactions with foreigners in a particular year in the capital account or balance of payments. These transactions include import-export, capital investment, loans, grants, remittances, etc.) etc. have not changed much. But the recent developments in the financial account (financial account, which is a component of the balance of payments. It covers total claims and liabilities outside the country such as direct investment, portfolio investment, reserve assets, etc.) is a matter of concern. Personal loans have increased in the last 7 years and they are guaranteed. This is a matter of great concern. Because short term loans are increasing now. There will be a current account deficit. It can be fulfilled by remittance. But the outflow to the financial account due to credit expansion will be a major concern. Due to this the reserves will decrease rapidly. Now new problems have accumulated with previous problems. Moody’s credit downgrade was again associated with it.
Education and health is a major area of social development, which affects people from all walks of life. The review shows that the education budget has increased by more than 15 percent, but only 8.24 percent over the previous year. The education budget is over Rs 88,000 crore, which is 11.57 percent of the total budget (it was over 12 percent in the current year). As a percentage of GDP, the education budget has also shrunk. The proposed health budget is over Rs 38,000 crore, which is 5 percent of the total budget. This ratio has remained unchanged for a decade. Reduction of out-of-pocket health expenditure is not possible due to the traditional nature of allocation. It should be remembered that only 23 percent of our total health expenditure comes from government allocations and 68 percent has to be borne by private ownership. Therefore, if the share of health in the budget is increased, the pressure on the citizens will be reduced a little. The health sector may not be increased due to the inefficiency of the budget implementation of the concerned ministry. Bangladesh Udichi Artists Group says that the proposed budget is not conducive to cultural awakening, which has disappointed the cultural workers of the country. Society survives through the progressive development and excellence of culture. For a long time, the rise of communal evil forces has been noticed in the country, in various ways they are conducting activities against the spirit of the fundamentalist, liberation war in this country. Cultural practices play a very important role in preventing these inefficiencies and dealing with social crises. The essentiality of culture is undeniable in managing the country in a non-sectarian, fundamentalist, human-conscious manner and in improving the human qualities of the generation. But the field of cultural practice has always been neglected. This year’s budget is no exception, which is less than 1 percent of the total budget. And it ends in the payment of the salaries and allowances of the officials and employees engaged in the Shilpakala Academy and the entertainment of the urban people centered on the Shilpakala Academy.
There is no sign of the kind of patronage needed to bring about a cultural awakening. Every year the cultural sector is neglected in the budget. Even a particle of this budget allocation does not reach the large population of the country who live in villages, the individual enterprises or institutional enterprises working for the development of their culture. How will society change? And among the 4 components of establishing Smart Bangladesh, smart society is an important issue and social thinkers should move forward with it. In order to achieve the goal of a developed Bangladesh by 2041, the Prime Minister’s thought-filled initiatives to form ‘Smart Bangladesh’ deserve praise, but if its implementation is not 100 percent, the desired achievement is not possible. For that, the continuity of the government is required.
The national election is ahead, which is discussed at home and abroad, the heated field, the politics is currently moving beyond the country arena to the international arena, about which the people of the society have no end of thoughts. There is an increase in the prices in the market, the people of the society are suffering, yet they are relieved to some extent by getting the humanitarian benefits of the government. The budget will come and the budget will go, the democratic process will remain between the coming and going of the government. Meanwhile, the forces of the country’s liberation war, who are currently in power, have earned the status of a developing country today in their journey of the last 14 years. Therefore, it is hoped that we will help in the management of the government in the future by trusting in the leadership of Bangabandhu in the hope of maintaining the continuity of the government and building a non-communal Bangladesh.
Dr. Mihir Kumar Roy: Agricultural Economist and Researcher; Dean, City University.
Source: Bhorer Kagoj by www.bhorerkagoj.com.
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