No incentives for poor, middle-income groups: Debapriya

The proposed budget for FY23 did not provide incentives to the poor and middle-income segments of the population, instead offered amnesty to money launderers, which means there are no political representatives to speak for those brackets, said Dr Debapriya Bhattacharya.

Addressing a media brief on Sunday titled “National Budget 2022-2023: What is there for the underprivileged people?” he added that the budget did not offer anything to the poor and middle class, rather benefitted money launderers and disappointed honest taxpayers.

Dr Debapriya, distinguished fellow at the Centre for Policy Dialogue and also the convener of the Citizen’s Platform for SDGs, Bangladesh, stated, “The scope for money launderers to get back their money is an immoral, politically reckless, and economically inappropriate decision.

“In the budget analysis, it seems that the middle class is now politically unrepresentative, socially unguarded and a target of neglect. On the contrary, they have been accused of tax evasion.”

He continued, “The finance minister has reduced the corporate tax rate, but kept the tax-free income limit at Tk 3 lakh without giving benefits to the middle class. I think this ceiling should now be at Tk 5 lakh.

“These aspects of the proposed budget are proof that it is for the benefit of a certain class of people.”

Dr Debapriya says the proposed budget for FY23 focused on the challenges of current issues, but it lacks the initiatives to mitigate those challenges. He urged the government to tackle inflation, and recommended reducing the customs duty of fuel and LNG imports similar to India.

“It is not the time to hike electricity prices. The government can reduce the customs duty on fuel, and it might positively impact Bangladesh’s efforts to tackle inflation.”

He said it was commendable that the government proposed to increase subsidies in the budget for FY23, but most of it will go to the power sector. Adding that the subsidies have both good and bad sides, Debapriya called for the elimination of bad subsidies.

Regarding the social security programme, Dr Debapriya said that even though it is said to be 2.5 per cent of the GDP, if the pension is excluded, the expenditure on real social security is little more than 1 per cent.

In terms of amount, the allocation for the social safety net programme is Tk 3,000 crore less than that of the previous budget. The amount of allowance is not being increased as well.

Saying that the size of the budget has not increased compared to the size of the economy, Dr Debapriya said, “The budget aims to achieve high growth with reduced investments, meaning that the budget talks big, but is actually smaller in scope.”

“It is important to see whether it is necessary for Bangladesh to seek foreign aid from the International Monetary Fund (IMF) to bring economic stability, without making a mistake like Sri Lanka.”

Commenting on the amnesty proposed for money launderers, Transparency International Bangladesh’s (TIB) Executive Director Dr Iftekharuzzaman voiced concerns saying, “Bangladesh could face international challenges in preventing money laundering.”