To a young socialist, this budget’s attempt to rebuild our economy seems to be based on corporate greed
At the end of last month, the national budget for the Fiscal Year 2021-2022 was passed.
After a year in which the Bangladeshi economy, alongside the global economy, was ravaged, the FY21-22 Budget does well to get ourselves back on track.
There are no surprises about the business-oriented perspective this year though; the Bangladesh government has always pushed for a budget that promotes corporate and public investment.
But to a young socialist, this budget’s attempt to rebuild our economy seems to be based on corporate greed and the wants of adults now, and sets many dangerous precedents for the future ahead.
It is important for us to identify negative precedents and protect our future that would otherwise be hampered.
The effect of a single fiscal year’s budget may be forgotten a few years from now, but as budgets can set precedents, they are also about trends.
The trends that we see from this fiscal year’s budget and prior budgets, such as continuous corporate tax reductions will continue to shape future budgets, and of course, our lives in the future.
It is necessary for us to speak out on this budget and its trends, both positive and negative, that directly pertain to the lives we will eventually lead.
Many aspects necessary are left overlooked.
The education sector and the healthcare sector, even though they were consumed by the ripple of the pandemic, seem to have been given the bare minimum increase in their allocations.
The things we will need in the future, such as a strong healthcare system, a strong education system, and a sustainable environment do not seem to matter as much to our policy-makers now, but it is my generation and the following generations that will suffer.
The structure of this budget is extremely focused on a short term boost to recoup losses held as a result of the Covid-19 pandemic.
This year’s budget outlined a plan to reduce corporate taxes.
Listed companies will have their tax rate cut from 25% to 22.5%, while non-listed companies will have their tax rate cut from 32.5% to 30%.
This continues a pattern from the previous year’s budget where non-listed companies had their tax rate cut by 2.5% from 35%.
With the reduction of corporate tax rates for listed companies as well this year, we can see a trend starting to occur where corporate taxes are continuing to reduce.
While to the traditional economist, this is all well and good.
These continuous tax reductions will encourage higher corporate expenditure, and in turn, a stronger economy.
But this is a dangerous trend, as doing so, we are leaving behind the growth of our infrastructure.
As for both listed and non-listed companies, the corporate tax rate was reduced by 2.5%, this would account for approximately Tk19,033 crore ($2.25 billion) in lost government revenue, if calculations are made based on the previous fiscal year’s GDP in proportion to corporate expenditure.
If this pattern continues, we are likely to see more sacrifices made in the growth of our infrastructure.
My generation will grow up to live in a Bangladesh where healthcare, education, transportation, and other aspects of infrastructure will be underfunded and underdeveloped.
And we cannot be blind to this, as we are already seeing it. This needs to be reversed, and taxes need to be raised.
The portion of the budget allocated to the Health Ministry increased, in relative terms, ever so slightly.
The previous fiscal year, it was Tk31,472 crore ($3.74 billion), while for this fiscal year, it is Tk32,731 crore ($3.89 billion).
During this period in which daily Covid-19 cases records for both infections and deaths are being surpassed consistently, this slight increase will only make an imperceptible difference.
This is already a sacrifice made in order to ‘strengthen’ the economy.
It boggles my mind that during a worldwide pandemic, healthcare is not made one of the top priorities, and it leaves one to wonder—if during a pandemic the attention given to healthcare is already negligible, what will it be when the pandemic is over?
Perhaps even less attention will be paid to this necessary aspect of our life.
Education is given a necessary boost, but once again, not big enough.
This fiscal year, the education budget has increased to Tk71,952 crore ($8.56 billion) up from Tk66,401 crore ($7.9 billion).
According to Unesco, a country should spend around 4-6% of its GDP on education.
Bangladesh only spends 2.1% of its GDP on education, ranking 183 out of 198 countries in terms of wealth to education expenditure. Appalling.
In the past 16 months, Bangladesh’s education system has fallen to its knees as a result of the pandemic, and this is where we should see a significant increase in education spending, but this fiscal year, education is neglected once again.
It is clear that we are sacrificing our future for corporate greed.
What about climate change?
But in my eyes, the biggest problem lies in the lack of gravitas afforded to the climate crisis.
A minute proportion of this year’s budget has gone towards tackling the endemic problems that result from climate change.
This year, only Tk25,125 crore ($2.99 billion) has been afforded towards combating the climate crisis—a puny 0.73% of our GDP.
According to the Intergovernmental Panel on Climate Change, 27 million Bangladeshis are at risk of displacement by 2050.
This is the biggest threat to our future, and we are discarding it as a non-factor.
But I do see positives too.
I applaud the Finance Minister’s decision to allocate almost one-fifths of the budget to increase this year’s social safety net to Tk107,614 crore ($12.66 billion).
This decision is monumental, and will help a significant portion of our underemployed and unemployed population.
This gradual increase of the social safety net needs to continue each year.
As a socialist, tax reduction in most cases is something that I find myself unable to support.
But this fiscal year, the new policy of introducing tax rebates to those who employ transgender workers is something that I can wholeheartedly get behind.
The policy states that organizations and corporations who employ over 100 transgender employees, or have transgender employees represent over 10% of their workforce will receive tax rebates.
I cannot stress the importance of this policy—it is a colossal step in achieving parity between those who identify themselves as a member of a binary gender and those who do not.
It paves the way for future policy changes that will incorporate the marginalized minorities in our community and economy.
I understand the significance of this budget—the rapid growth that the Bangladesh economy has enjoyed over the recent past is a testament to our economic resilience.
This year, that has been scuppered significantly by the Covid-19 pandemic.
For many, a business-oriented ‘capitalist’ budget would be the right thing to do.
In fact, Bangladesh has successfully achieved economic growth this way for many years, and this year’s budget will be no exception.
However, in doing so, it sacrifices the future for the present.
Marxy Marx is a pseudonym