It is that time of the year again.
The much awaited national budget for the fiscal year of 2018-2019 before the next election is to be announced today. No doubt that it is going to be a very ambitious one, but is it likely to be effective? We don’t know.
So, what are some last minute concerns from us citizens? Let’s find out:
Employment
According to an official, the government is likely to set the GDP target of this year’s national budget at 7.8%, and Finance Minister Abul Maal Abdul Muhith has declared the size to be Tk 4,64,573 crore with an emphasis on education, health, sanitation, power, energy, and infrastructure.
However, it is going to be a very big challenge for the government to increase employment and generate income through job creation, mostly for the unemployed youth, as Dr Debapriya Bhattacharya has said.
Prevention of tax dodging
It has been thoroughly highlighted that the upcoming budget will hold a business and investment-friendly tax policy with disabled and injured freedom fighters getting the same tax ceiling as before.
A reduction of corporate tax has been a long-demanded policy from stake-holders. However, are there going to be enough measures to prevent tax dodging? With the rising inflation rate, high interest rate on bank loans, depreciation of taka and poor business climate, how is it possible for the government to maintain the corporate tax cut with a budget deficit of 5% (estimated)?
Professor Mustafizur Rahman, distinguished fellow of CPD opines about the necessity for zero tolerance against tax dodging in part of the National Board of Revenues. He strongly recommends for condemnations to be taken against tax dodgers be it individual or corporate.
The matter of refugees
As for the humanitarian crisis that has been long-centred on the Rohingyas, it is of no surprise that the overcoming the problem needs much more attention and financing from the government than what has been estimated.
Dr Khandakar Golam Moazzem mentions in an exclusive interview at CPD: “While formulating the budget, government first decides its expenditure, then deficit, and finally the income. As we all know, the system is to first fix the income and then the expenditure. So, this reverse process faces inconsistencies especially while deciding the source of income. This actually weakens the budgetary disciplines.”
In response to the insufficient investment made on the Rohingya crisis, he adds that rather than spending on unwanted areas, the government should allocate expenditure on immediate social causes; the Rohingyas need to be given training and identity cards for their protection.
Implementation is key
The finance minister has stated: “The investment to GDP ratio needs to be increased from its present position of only 29% to nearly 35% in order to accelerate development.” Besides, the budget for the coming fiscal year of 2018-2019 is going to have the highest allocation for the transport and energy sectors.
But the question of how much of it is going to be implemented needs a thorough response. Abul Kashem Khan, the current president of DCCI proposes maintaining the existing HDI index and improving economic stability through an investment-friendly revenue management system.
Regarding allocation on the five development paradigm sectors viz- infrastructure, energy, education, health and social safety nets, experts agree that reform initiatives are more important than prioritizing on the election, and that citizen engagement in project monitoring ought to be done.
Overall, however the budget is being allocated, the implementation of the allocations is the biggest concern for us citizens. Over the years, the trend has shown only about a 50% implementation of the budget, even though the amount has only gone up and up.
According to Khandaker Golam Moazzem of CPD, last year’s budget was a rather costly endeavour on part of the government, as data suggests only 76% implementation. He says: “If such a huge amount of unimplemented structure remains in the budgetary frame, it will increase mismatches in resource allocation and distribution.”
It is estimated that the budget implementation rate for the coming fiscal year is going to fall to 74% from 87%, as was in the fiscal year 2013-2014; which only makes us lose hope. The former finance adviser to the caretaker government of 2007-2008, Dr AB Mirza Azizul Islam comments: “It has become a tradition in our country to announce a record budget every year.”
Experts agree that poor implementation of the Annual Development Program (ADP) and the much-too grand revenue mobilization are the reasons behind this. In response to this, DCCI President Shafiul Islam Mohiuddin aptly puts: “The budget should be prepared keeping in mind the recommendations of the stake-holders, as outlining an ambitious budget with an extreme revenue target and a special focus on the oncoming election bears the risk of an adverse effect on the economy; for the burden of a big budget will only fall upon the people.”
Maisha Mehzabeen works at the Dhaka Tribune and is a graduate in economics.
