The proposed budget for the upcoming fiscal year is not consistent with the government’s target to achieve Sustainable Development Goals (SDG) by 2030, and the seventh Five Year Plan, said South Asian Network on Economic Modeling (SANEM).
“Only 78-80% of the budget is implemented and the lack of strong political will is to be blamed for the situation,” Selim Raihan, executive director of the private think tank, said at a post-budget discussion titled “SANEM’s quarterly review of Bangladesh economy” at Brac Centre Inn in Dhaka on Saturday, two days after the government unveiled the country’s biggest ever budget proposal of Tk4.64 trillion for fiscal 2018-19.
He said the revenue collection target set by the government will be unlikely since the National Board of Revenue is yet to increase its capacity in this regard.
“The government could not raise the tax-GDP ratio, which currently stands at around 10%, even by 1% in the last 10 fiscal years,” he observed.
Selim said mega projects lack planning, management and implementation, which is why they become costlier and more time-consuming.
He further said the finance minister should have had special instructions regarding the fast-track projects in his budget speech and questioned whether the release of funds or the potential waste of money is being monitored by the government.
“If not so, the projects will become a burden for the next government,” said Selim, also an economics professor at Dhaka University.
In case of development budget, many projects are completed within a very short time at the tail end of a fiscal year, raising many eyebrows about the quality of the project work, he said.
Selim said spending from the budget does not justify the success of its implementation and this year is crucial for Bangladesh as the national election will be held by the end of the year.
“So, the first six months of the financial year is very important. And, the incumbent government will try to spend more funds during this period,” the DU teacher said.
He also identified a number of major obstacles, including imbalance in foreign exchange, anarchy in the banking sector, slack individual investment, and unemployment, which hinder proper implementation of the budget.
There is no roadmap to address the issues persisting in the banking sector, while the government has taken some ad hoc measures for the industry sector, Selim pointed out.
The economist said special schemes or directions about the specialised economic zones must have been mentioned in the budget to fetch more individual and foreign investment in the country which will help generate more employment.
Sayema Haque, associate professor of economics at DU, termed the revenue structure weak.
She said the government plans to increase the income tax rate instead of expanding the tax collection range.
Senior research associates of the think tank, Nazmul Avi Hossain, Zubayer Hossen, and Iffat Anjum, also spoke at the program, among others.
