Budget focus should be on taming inflation, extending social- safety net and introducing ration cards for crisis-hit poor and low-income people rather than concentrating on growth only.
Economists and experts at a pre-budget discussion Saturday offered the suggestion on budget making in the prevailing context featured by pandemic fallout, blowback from war and sanctions and global financial crunch.
The distinguished discussants also said the country's banks should behave "rationally and responsibly" as the central bank of Bangladesh allowed fixing market-based US dollar rates. The forex-regime relaxation should, they feel, be followed by revision of bank deposit and lending rates.
They recommend for the government to mount strong watch on the foreign-exchange market as the free-floating greenback might cast negative impact on the country's import-dependent economy.
The speakers note that many priority sectors, including health and education, require increased allocations but with the size of the existing budget it appears impossible.
They feel that the country needs to raise tax-GDP ratio for increasing allocations for necessary sectors, and to this effect, tax laws, regulations and administration require reforms.
Policy Research Institution (PRI) and Ekattor TV organised the discussion on "Macroeconomic Uncertainties and Budget Priorities for Bangladesh" in a city hotel, days ahead of the new budget to be placed in parliament.
PRI executive director Ahsan H Mansur moderated the discussion.
Speaking at the meet, former adviser of caretaker government AB Mirza Azizul Islam, from his experience of his time in public office during the 20007-08 financial crisis, said the government should include more people in social-safety-net programmes.
He said his measures during the 2007-08 global economic meltdown, including 100-day employment- generation programme and various allowances, didn't let increase the population living under poverty line.
He urged the government to aid vulnerable segments of population through rationing, or any other means possible.
Mr Islam also said the upcoming budget should address the issues of corruption and appropriation of safety net or rationing funds as allegations of misappropriation such funds are rampant.
"Unless it is done, these measures will not work," he said.
Mirza Aziz mentioned that inflation is increasing and the data government providing about inflation are "questionable".
"Contractionary fiscal or monetary policy can't address such inflation as it is mainly externally driven," the former finance adviser told his audience
Lauding central bank's initiative for floating exchange rate, former Lead Economist of the World Bank Dr Zahid Hussain said side by side allowing market-based exchange rate, the central bank buying the US dollar at a higher price but selling at lower price is "suicidal".
He said the government should be careful about budget deficit this year.
Mr Hussain also suggested that the government ought to ensure supply management of goods and commodities, as prices are on the upturn.
The Financial Express Editor, Shamsul Haque Zahid, told the meet that the government doesn't seem to have control over the businessmen, which is not supposed to happen as well.
"But this shouldn't let go free as well."
He said there is a new proposal for increasing edible oil price by Tk 24 per litre, though, according to news reports, the prices of edible oils were on downturn in May.
Distinguished Fellow of the Centre for Policy Dialogue (CPD) Dr Mustafizur Rahman said this budget should focus living standard, buying capacity, not growth.
"The budget this year should not be growth-centric," he said.
He said the central bank should give a thought on interest rate likewise free-floating exchange rate.
Director-General of Bangladesh Institute of Development Studies (BIDS) Bianyak Sen said the government should provide assistance through rationing or any other means to lower-middle-class population during ongoing crisis.
"It is possible to provide assistance to at least 10 million people for six months within existing budget space," he said.
He said the existing inflation crisis is not structural crisis, it is sudden and the crisis may go away within six months.
BBS should improve their quality of data management to present right inflation and other data.
Former chairman of the Association of Bankers, Bangladesh (ABB) Syed Mahbubur Rahman said it is not possible to cut imports drastically at this moment.
"So, I urge the banks to behave responsibly and rationally."
Replying to a question, he admitted that there is over-invoicing which is responsible for ballooning import basket, but there are also imports including capital machinery happened in recent weeks.
Chairman of Policy Exchange of Bangladesh Dr Masrur Reaz urged the government to keep watch on the exchange market lest there be a free fall of Taka price.
He said, "Floating exchange was a demand for long time, but the government doesn't have luxury to let it float free."
Former Chairman of the National Board of Revenue (NBR) Moahmmad Abdul Mazid said the government has legal right to ask for tax if it allows untaxed money in the economy.
He said tax rebate, tax exemption and system loss are some of the reasons the tax authority can't collect enough tax revenue.
Former NBR official Barrister Jahangir Hossain, Md Farid Uddin and PRI senior economist Ashiqur Rahman, among others, spoke at the event.
