The Center for Policy Dialogue (CPD) on Sunday said that the proposed budget for the fiscal year 2023-2024 failed to address the ongoing macroeconomic issues and ongoing crises.
Fahmida Khatun, executive director of the CPD, presented the keynote at the capital's "CPD Budget Dialogue-2023" event.
Her keynote included ten observations, during which she stated that the proposed budget appeared to be far from the underlying macroeconomic realities.
She also stated that there was a large disparity between the planned aims and that the projected budget failed to address the most pressing concerns.
“The current reality is inflation, but there is no reflection in the budget system to deal with the ongoing crisis,” she noted.
Dr Debapriya Bhattacharya, distinguished fellow of the CPD, said that there can be no such budget in an election year and it is an unscientific and unrealistic budget - which must be reviewed.
Dr Ahsan H Mansur, executive director of PRI, said that in the budget, the fiscal space is constrained.
Moreover, the limited allocation in the health sector is also noticeable.
Considering the overall facts, the financing will be extremely challenging. The domestic financing side is complicated and the bank does not have the capacity of funding.
“The finance market and banks both are in trouble,” he added.
Energy Adviser and energy expert of the Consumers Association of Bangladesh (CAB) M Shamsul Alam said that although the government is happy with the big budget, people are scared.
“The power and energy sectors (especially) are under vulnerable positions and there is a kind of predatory system in these sectors. We are currently suffering from an electricity shortage,” he added.
Rasheda K Chowdhury, an adviser to the former caretaker government, said that educational institutions and non-profit NGOs have been included under the Companies Act.
“A city educational institution can pay tax but how can a village educational institution pay corporate tax? How is this part of the education budget?” she questioned.
Labour leader Taslima Akhter said that inflation was currently over 10% but the budget talked about controlling inflation.
“There is no significant way to tame inflation in the budget. There has been talk of cutting subsidies and the social sector. While the owners get tax and business benefits, the workers are deprived,” she added.
She urged to expand the allocation of social safety for the workers.
Planning Minister MA Mannan said that it is good there are discussions regarding good governance.
“There is no proof that we misrule. We are following good governance,” he added.
He also said that the budget is now proposed and is prepared by the government.
"Rabindranath (Tagore) has a saying that injury is better than negligence. It is a big thing that the budget is not neglected."
“Inflation is not related to the budget; it is an ongoing matter. We are trying to control inflation, especially for 30% of poor people. We have increased the allowances and expanded the social safety net program coverage,” he added.
He also said that the government is providing products at a subsidized rate for them.
“We are going to formulate the Universal Pension Scheme in Bangladesh. Surely, it will be a great addition.”
Regarding the electricity crisis, he said that it is temporary and there was a momentary problem, but it is getting fixed.
The minister also said that the Tk2,000 mandatory income tax return is not for everyone, but rather for those who need to avail 40 different types of government services.
Responding to comments regarding specific budget allocations, he said that the budget is a comprehensive and holistic approach so there is no need to differentiate it in small segments.
For development, social stability and continuation are mandatory, Mannan added.
'Lack of democracy reflected in the economy'
Former commerce minister Amir Khasru Mahmud Chowdhury said that if there is an absence of democracy, there are reflections of it on the economic model.
The budget seems a budget of a patronage economy where it just assists its definite interest groups, not all people, he added.
"There are no questions on social instability, why the reserve is depleting, who is behind this and so on," he added.
The budget also lacks adequate measures against money launderers. Moreover, the Bangladesh Bank is not an autonomous institution anymore, Chowdhury also said.
DCCI President Sameer Sattar said that this is the year of cautious investment and it will make it difficult to match the demand for worker wages.
"I think if the tax-free limit is Tk5 lakh, it will help to tackle inflation a little bit," he remarked.
Former NBR Chairman Mohammad Abdul Mazid said that the income tax bill being passed before the budget was an incorrect choice.
CPD Distinguished Fellow Prof Mustafizur Rahman said that the children have been overlooked in the proposed budget despite the fact that they lost educational opportunities because of the Covid-19 lockdowns.
Former environment and forest minister Anisul Islam Mahmud said that the conditions prescribed by the International Monetary Fund (IMF) were long recommended by civil societies, researchers and economists for at least ten years, but to no avail.
“But to take a loan of $4.5 billion, the government accepted the same prescriptions (of the IMF). We always set a target to reach near India and surpass Pakistan, which gives us a temporary mental peace but it is wrong and an unsustainable policy,” he added.
BGMEA representative Arshad Zaman Dipu said that at any cost, the growth of the RMG sector must be sustained.
“Government should take initiatives to tame the inflationary pressures. For the development of the RMG sector, all necessary policy support must be addressed,” he added.
To protect the RMG workers from inflationary pressures, he urged the government to initiate SSNPs directly for the four million RMG workers.