It's just as well that the opposition in Parliament is 'friendly' and the biggest opposition party is sleepwalking. Otherwise, the one uniformity in reaction to the budget, that no one's happy, wouldn't have sounded like such a bleat. Chambers, economists and individuals have gauged their words carefully but the consensus appears to be the same. True-blood analyses are flooding the social media, that too more as a form of protest and those who can interpret the fine print into layman's language are either not interested or just not talking.
Every year the script follows tradition. Ambitious budgets, huge incremental revenue targets, a list of negotiables and another of non-negotiables. Based on public outcry or intervention from the top, the negotiables are negotiated and the wounds of the other list have to licked at in silence. This fiscal's budget is 26 per cent over that of last year's, 61 per cent coming through tax and duties. Education and technology, public administration and transportation and communications taking up 42-plus per cent of the total allocation, whereas agriculture figures much lower in the pecking order, below defence. And industry only 1.0 per cent.
The broad questions obviously centre on where the revenue will come from and what will be the quality of spend especially in education not to mention the cost of public administration. The deficit is pegged at 5.0 per cent of gross domestic product (GDP). The process of the budget has been fine-tuned and gone through different approval processes in a tick-mark for governance. An improvement could well be an honest review of budget utilisation not just in terms of numbers but project progress and quality of delivery. Projects that have over-shot estimates must be scrutinised as much as those that never took off. And the moneys saved or otherwise allocated have to be accounted for. Appropriations are fine as a matter of course but cannot balloon out of control.
High allocation for education is as always welcome but given the debacles of late, the specific thrust towards achieving quality would have been nice to know, as indeed the inclusive discussions to that end. With a new generation losing interest in agriculture, a fillip to that end remains to be seen beyond the usual barriers of subsidy and price support. The relatively low allocation for health is also somewhat surprising as one of the constitutional rights of the citizen.
Disappointment in the implementation of the new VAT law runs high. The uniform rate of 15 per cent puts further pressure on the larger segment of the population and though the finance minister has insisted, expansion of the exempted list will prevent price spirals, not too many economists agree. What is obvious is that instead of expansion of the tax net, the minister has chosen to further squeeze the identifiable taxpayers and bank account holders. Banks are fretting that in a scenario if negative net return deposits will dwindle further. If this is designed to force investments in the stock market, the chance is of a boomerang resulting in capital flight. The concept of a tax on bank accounts over Tk 100 thousand (one lakh) is novel but totally unfair. Increasing it adds insult to the injury.
On the flip side, little has been said about the quality of service for the tax being paid, steps or measures to reduce cost of governance, plugging loopholes for bank and share market scams, action against perpetual defaulters and austerity in unnecessary expenditure. It's almost as if these areas have been surrendered without a fight. Perhaps the most difficult one to understand is the unwillingness to raise the minimum taxable income. Government employee salaries were enhanced to reduce the growing gap between income and expenses and yet there's no case for a higher tax relief base. Somehow, it doesn't make sense.
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