Bangladesh: New Budget is the Starting of Transformation of the Economy

The main spirit of the budget is always the political vision of the ruling political party. Budget is not a book of accounting of income and expenditure statement; it is a vision of the nation or political parties.

by Swadesh Roy-Jun 20, 2017

( June 20, 2017, Dhaka, Sri Lanka Guardian) The government has totally failed to convince the people about the national budget 2017-18. It may be said now that the government had not any preparation to make the people understand about that portion of the budget which is directly related to the daily life of the people; even it also may be said that, their finance ministry, information ministry even the parliament members didn’t perform any groundwork on how they would try to make the people understand regarding the characteristics of this budget. How it is good for the country, why it is a new type of budget in our history, and why the government has proposed this budget which is almost a new type comparing to the previous should have been circulated properly by the government.

The budget proposed by the government is not only the biggest budget of the history of the country but also a budget for a new economy of Bangladesh. From this budget, Bangladesh will start its self-dependent economy. To reach from a lower middle-income group country to a middle-income group country, it is absolutely a transformation of the economy of the country. What is that transformation of the economy? This budget is the starting point of that transformation; because, if the country wants to reach the middle-income group, the economy should be near hundred percent self-dependent. Many of the foreign aid will be cut off then. So, country’s own source of wealth will be the main source of the budget. That is why all kinds of direct and indirect taxes will be one of the main sources of wealth of any budget.

The per capita income of the people is now 1624 US dollar but inequality is high. So, it is the time to increase per capita income and reduce the gap of inequality. Increasing per capita income is easier than reducing the gap of inequality. But, to build up a balanced economy, it has to be done proportionally and simultaneously. Reducing the gap of inequality in the economy is a must. In this position, the national budget has to be visionary, optimistic and its method of taxation will have to be very much calculative. Besides, the government has to pay a foreign debt in a large scale which will help the country to come out from the `net of the foreign debt’ rapidly. In this condition, the country has to pay a huge amount of money through foreign exchange, sometimes for this cause, the economy may fall in a deficiency of foreign exchange. To recover this shortage of foreign exchange, the country should take two policies simultaneously; firstly, the economic strategy basically the taxation policy should be conservative for importing luxurious goods. Imposing high duty on importing luxurious goods, the government has to create one kind of indirect block for importing those goods. Then luxurious goods importing will be reduced. So, its price will go high, but it will not hamper the lifestyle of upper middle class and the upper class because of their high-income level. But, the country will import those less which will eventually make foreign exchange spend less for importing commodity. Secondly, the government has to take a priority-based action for foreign direct investment. The government has to give many facilities and will have to make many infrastructures rapidly aimed at foreign direct investment.

This budget has both the policies. Even, the government has given duty free facility on importing some goods which will help increasing franchise restaurant and hotel rapidly. Because, it is a precondition or part of the infrastructures to make the country capable of using foreign direct investment and a huge number of foreigners will stay here continuously. However, it has been misinterpreted by the press, opposition political parties, and the members of the parliament of the government party, even by the economists. Such as, the issue regarding the tax on the deposit money in the bank account is being misinterpreted. Before this budget, it was imposed 150 BDT on 25000 BDT, so depositor had to pay 600 BDT on one hundred thousand takas but now it has been removed up to one hundred thousand BDT.

This budget has imposed 800 BDT on one hundred thousand BDT deposit. The finance minister has already said that he would cut it down. But, to maintain a proportion by reducing in the gap of inequality it was logical. Less income group would have got more remedies if it had continued. However, a democratic government needs to think from many perspectives. Sometimes they have to honor the mass people’s opinion despite the fact that it is not hundred percent correct. Besides, regarding the Bank deposit issue, people are criticizing the government for an unofficial statement regarding decreasing the interest rate of savings bonds. Government has formed a committee to take decision on it, but in the meantime International Monetary Fund (IMF) gave a statement for reducing the interest rate of savings bond. It is a very sensitive and essential issue in our economy because we have no strong stock exchange market. So, lower and middle-income group have no alternatives to invest their savings. But this savings is the only security in their life. Until and unless the stock exchange market of the country is strong, people will not get the confidence to invest there without being afraid of any unexpected debacle. That is why the government has to maintain a high rate in these savings bonds for the lower and middle-class people. In this sector, the government can provide a subsidy, but this subsidy can make more profit. Because if the government gives a high rate in the long time savings bond, the government will get huge capital which they can use in many development sectors. Direct and indirect profit of those development sectors will be more than the subsidy ultimately.

However, these two issues have touched a mass, so it has wrapped up the whole budget. Therefore, to open up the wrapper, we should analyze the character of the budget properly. This budget is basically self-dependent economy build up the budget. So, we have to analyze keenly on “removing and imposing taxation portion of the budget” and before that, we have to study whether the process of the taxation is in favor of decreasing inequality and collecting wealth. If it is in favor of those, it is rational.
The government should have made at least a group of parliament members and their spokespersons understand in an ease language that why is this tax policy and how it will not hamper the life of any classes. These people could deliver the exact information to the people easily. Upper class and upper middle class have got money; on the other hand, a huge number of the commodity is out of tax, which is for the poor and lower middle-class people; because it is daily necessity commodity. The present government led 14 party alliance has entirely failed to give a proper reaction to the budget, their statement says that they did not understand the goal of the budget.

The main spirit of the budget is always the political vision of the ruling political party. Budget is not a book of accounting of income and expenditure statement; it is a vision of the nation or political parties. Budget is never limited in the economy area, it has a totality character. It presents the government’s vision on education, culture, health even the humanity. Such as, for last eight years, the government has been allocating money for the trail of war criminals; anyone can say, it is not an economic and social build-up issue, but in reality, it is an economic and social build-up issue. Because, to make a nation, we must have to clear-up the war criminals from the society, which is being done by Europe still now. However, the government has failed to tell their people the real message, the reality, and the characteristics of the budget. They have proposed a historical budget but have failed to make the people understand the actual scenario; in spite of that, still, they have time in their hand to make the people understand that this budget is the starting of the transformation of the economy.

Swadesh Roy, Executive Editor. The Daily Janakantha, Dhaka, Bangladesh. He is a highest state award winning journalist; and can be reached at swadeshroy@gmail.com