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Staggered budget won’t stabilise economy: Speakers

Staff Correspondent
07 Jul 2024 00:17:36 | Update: 07 Jul 2024 00:17:36
Staggered budget won’t stabilise economy: Speakers

The parliament approved the national budget for the fiscal year 2024-25 on June 30. Key features of the budget include an expanding deficit, record revenue projections, development expenditures and subsidies, financing constraints, and their realistic options and implications have been noted.

However, speakers claimed that the budget is staggered, deceptive, and misleading, which will not stabilise the current economic headwinds.

They also claimed there is no transparency and accountability as the oligarchs are benefiting and will be benefited as ever.

The revenue target was never fully realised. However, some government officials are puffing up with wealth, and the allocation for education, health, and social safety net decreased due to capacity payment and interest payment increases. Some companies' VATs have been waived while honest taxpayers are being scolded.

Speakers made the remarks at a webinar' titled 'Budget 2024-25: What will be the future of the economy the economy?' organised by the Forum for Bangladesh Studies (FBS) on Saturday.

Journalist Monir Haider moderated the 28th webinar of FBS while Jyoti Rahman, economist and director at International at Sydney Policy Analysis Centre, presented the keynote paper titled 'Bangladesh Budget Review 2024: A medium-term macro-fiscal perspective'.

As discussants, Rashed Al Mahmud Titumir, professor, Department of Development Studies, Dhaka University; Zahed Ur Rahman, columnist and political analyst; Zia Hassan, researcher of Development and Economics, were present.

In the webinar, Shushashoner Jonno Nagorik (SHUJAN) Secretary Badiul Alam Majumdar states, "As always, this budget is also staggered, deceptive, deceitful, and misleading. Opportunities are being offered to the self-centred while the common people suffer."

As illustrated in Jyoti's presentation, the GDP has increased by 1 per cent since FY21 and half of that is due to subsidies. There was a Tk 429 billion subsidy increase between FY21 and FY24, in which a Tk 261 billion subsidy increase was given to the Bangladesh Power Development Board (BPDB) alone.

Following that, Badiul added, "The rule of law is not being established. There is a clear violation of the constitution. BPDB's $261 billion subsidy has reduced allocations to various sectors, including education, health, and social safety net."

Titumir said, "The politicians are controlling the economy, keeping it away from the people's participation. This budget is no different than those of other one-party dominant states. The budget deficit BPDB's subsidy increases yearly due to rent-seeking (manipulating public policy for profits).

"Once, for capacity charges, a subsidy was given for development purposes, but now the government keeps power by keeping self-centred individuals happy. The revenue did not increase in accordance with the GDP growth because informal tax is higher than the form "l taxes," he added.

Titumir also noted, "Due to the de-industrialisation in agriculture, employment in the informal sector is increasing, creating false people's minds by spreading false or misinformation."

The DU professor urged the government, "Instead of peddling development, be a peddler of accountability."

As per Bangladesh Bank's regular update on the balance of payments published on Wednesday, there is a $14 billion mismatch between the Export Bureau's export data.

Centre for Policy Dialogue Executive Director Fahmida Khatun stated, "The budget being implemented under the current political-economic structure has malfunctioned. Common people have nothing more to gain.

She raised the question, "Where has the $14 billion gone?" Adding that the policy, taken through false data, will malfunction."

Jyoti pointed out that due to the data mismatch, there are risks of revenue shortfall. And that the budget documents transparently admit to optimistic bias.

"By meeting the revenue target, managing expenditure through regular monitoring, reforming the banking and financial sectors, choosing between development expenditures or subsidies, grants and transfer and then finally, long-term growth and political, economic consideration, the problem can be solved to some extent," Jyoti added.

Zia Hassan said that the government tends to print more money, which leads to ongoing challenges.

Echoing Zia, Zahid Ur Rahman said that there is no populism in the budget. The projected revenue will not be collected. The state keeps far from its people, and there is a downward trend.