Predictably and unspectacularly big
FOR the fourth year in a row, the finance minister proposed a predictably and unspectacularly big budget — with a total outlay of Tk 1,91,738 crore and a deficit of Tk 52,608 crore — with arguably no major change to the general principle of the budgets proposed by the incumbents thus far in their tenure. Therefore, like in all previous occasions, the concern is in the first place whether the government will eventually be able to finance this huge outlay, will be able to implement it, will be able to manage it. In fact, the experience of the last three years tends to indicate that the government will quite likely fail to keep inflation near its budgetary projection of 7.5 per cent, the government will be raking up their bills borrowing from the banking sector and create a liquidity crisis, subsidies will certainly soar beyond its budgetary allocation on account of the import bills accrued from the purchase of fuel oil to finance the super-expensive rental power plants, some high-sounding initiatives such as public-private partnership will hardly see the light of day despite a huge outlay, and debt servicing of existing debts will eat up a huge chunk of future debt finance. Unfortunately, on Thursday, the finance minister could not come up with any meaningful measure to address the problems or plug the holes in the economy created by his previous budget outlays and policies. Therefore, there is not much choice for us but to look ahead to an uncertain future.
It would, however, be too sweeping to say that nothing has changed. Some things in the budget outlay for the fiscal 2011-12 have been changed around; however, there is no reason to believe that they are for the better, at least for ordinary people. In the budget for the fiscal 2011-12 there appears to be greater emphasis on tax revenue generation — in fact 58.5 per cent of the total budget is set to be financed through it in the coming fiscal year. This in itself is good news, because citizens of a country should essentially take responsibility for their own budget, however, on closer inspection it would appear that the tax distribution is fairly lopsided and biased against low income groups. There is a rise in value-added tax and the minimum amount of tax to be paid by TIN holders, which of course will eventually fall more heavily on people in low-income brackets than others.
More importantly, in percentage terms, the government has actually reduced the percentage outlay on education and health — two of the most vital ingredients of human resource development, though the government deserves kudos for expanding the social safety net and increasing agricultural subsidy, which, at least in theory, benefit the low income groups, in a budget where they, otherwise, hardly have anything to look forward to.
In terms of economic growth, the proposed budget reduces the taxes on industrial raw materials — a welcome move; however,
for it to encourage development one requires power generation and infrastructure development, which, despite being a part of the proposed budget, is not very well laid out in terms of a comprehensive future plan.
To conclude, the proposed budget outlay for the fiscal 2011-12 is as grand and high-sounding as its recent predecessors, if not more, and makes bold projections which are dependent on a whole set of variables acting according to the whims of the finance minister and the government. This is, at best, unrealistic and unsound, and does bear any good news for ordinary citizens apart from more future woes.
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