Exhorting the Comptroller and Audit wing to ensure transparency and efficiency of public spending is almost an adage for presidents as they accept updated reports. Essentially there was nothing different about President Abdul Hamid having said so a day or so before. That is, except for the fact that during the same time line parliament passed an appropriations bill for a massive overspend of Tk 187-plus billion (18,700-plus crores) with only a handful of MPs speaking on it and no involvement of the Standing Committee on Public Accounts. Far from debate, a cool Tk 20 billion has been set aside in the proposed budget to prop up capital shortages of the same banks that have recklessly allocated loans that have turned turtle. And as the action against defaulters is either wrapped in the tangle of process in court or loans are generously and repeatedly rescheduled, they continue to burgeon. Close to a $ 100 million heisted from our reserves remain unrecovered and the probe report unrevealed. In a world of shrinking donor assistance, the deficit of a whopping Tk 1,120 billion (1,12,000 crore) in the budget remains to be costed.
And so the finance minister focuses on individuals' bank accounts to increase a tax, imposed quietly years ago that flies in the face of fairness in taxation. There has been an attempt to deflect attention by saying it's imposed on the service provided by banks but he of all persons must know that for every service banks cough up VAT, as do the depositors. Side by side with poverty alleviation, governments must provide the opportunity of generating wealth so that there is an impetus on consumer spending. Short of that, it is an invitation to further dodge tax. The jokes on social media are wide and varied; the laughs generated are mockingly acerbic.
Punitive taxation isn't a nice alternative to revenue shortfall. Either budgets have to be realistic through austerity or punitive action is required for the delinquents. If, after a defined period loans aren't paid back, tax should be slapped. Contractors failing to meet project deadlines should be taxed and rather than public servants accumulating wealth, it should be the hard-working farmers that should get benefits of windfall, speed money or whatever the terminology used for black money.
A former deputy governor of Bangladesh Bank had no qualms in stating that the banking sector has been destroyed. But pumping funds in for further misappropriation hasn't helped to sort out the mess and is unlikely to do. The point has been backed up by economists. Oddly enough, there aren't enough probing questions being asked why it is that public sector banks are in the red and private and multinationals aren't. Balms and salves may heal grazes but when gangrene sets in, amputation has no alternative.
Continuous years of allowing undeclared money to be legalised on payment of flat tax never brought in much. Appeals from the real estate sector to allow investment without questions in apartments and houses were listened to but the informal economy marches on twiddling the proverbial thumbs. Ideally, with the resources at its disposal it should be easy for the government to probe, even in phases, the unbridled and often inexplicable growth of wealth of many. The idea of cracking down on gold supplies in a country where imports have been banned for nearly a decade didn't happen by chance and now everyone's looking at one another to figure out how it came to this; as if it were a state-level secret.
Indeed Economic theories and principles are not cast in stone and must be flexible enough to cater to unusual circumstances. We live in such times when the changes are not just required, they must happen. Otherwise, there's little point in tall lectures about governance and rule of law.
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- Wednesday, 17 April 2024 |
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