Finance Minister AMA Muhith said the chairmen of parliamentary standing committees, at a pre-budget discussion, that the size of the country’s national budget for the next fiscal year will be Tk250,000cr.
This means that the size of the budget has doubled in five years. This is wonderful news. We have a GDP growth rate of about 6% for the 2013-2014 fiscal, which is a clear 1.5% higher than neighboring behemoth India. Our reserve is steady at $20bn, per capita income has crossed $1,100, the size of exports is satisfactory but remittance flow from migrant laborers is slightly on the ebb. Still, I am amazed at the robust character shown by our economy considering the fracas that resulted from political turmoils throughout 2013.
However, the migrant laborers’ issues will have to be addressed; the income disparity between the rich and the poor has to come down, and the perennial ifs and buts about electricity need to be resolved. In spite of load shedding still persisting for a few hours every day, gone are the hellish days of 2009 and 2010, but some are very skeptical about the rental power plant system and subsidies provided in the budget, and their skepticism is justified to quite an extent.
Currently, over 50% of the electricity generated is used for domestic purposes, which is not productive. More needs to go to agriculture and industries that would have a positive impact on GDP growth rate. The subsidy that needs to be provided is eating into other sectors, mainly health, the allocation is at an all time low (in percentage basis).
A severe shortage of natural gas is looming and it calls for extensive deep sea and inland drilling, but the cost of exploration is prohibitive. It has been found by experts that in order to get one trillion cubic feet (TCF) of gas one needs an investment of about $1.5bn for exploration, and then even after spending all that money there is no guarantee that one will get any gas at all. So foreign investment is absolutely mandatory in this respect; we cannot afford to spend $1.5bn without confirmed returns.
Development of infrastructure and its upkeep is high on the list of the government’s priorities, so is investment from the private sector. The government may consider infrastructure bonds (in dollars) for non-resident Bangladeshis (NRBs). The money of the NRBs, in many cases, is spent to feed and then create a lot of idle relatives (not all, I should clarify) and in the purchase of land; making an unnecessary spike in land prices.
There is also a dire need for bringing the deteriorating law and order situation under control and, needless to say, the rampant corruption in every tier of society.
There was a time, not too long ago, that the annual budget was a hush-hush affair, with the briefcase of the finance minister almost a modern-day Pandora’s Box. But I am happy to note that in the last few years the finance ministry has disclosed all the important details of the budget long before the day of the official announcement in parliament. This is excellent, since various quarters can provide their feedback before the finance bill is finalised.
I feel happy that, despite the many hiccups, the economy is on the right track. Some adjustments need to be made as we move along; there is no need for a “doom and gloom” scenario. We have proven that we are a resilient people.
