Budget 2023-24 containing eleven chapter, 249 pages explained different stages of reaching the goal of a SMART Bangladesh in a very cogent language. However, the narration of macroeconomic stabilities and targets seems to be as usual as like other budgets not reflecting the present practical susceptible situation of high inflation, changed situation after Russo-Ukraine war and conditionalities from IMF for getting only USD 4.7 billion loan and specifically those who are gradually getting marginalized and vulnerable.
In the announced budget, a vision for ‘Smart Bangladesh’, targeting per capita income of at least US$ 12,500; below poverty line people less than 3 per cent, extreme poverty to zero; inflation 4-5per cent; budget deficit below 5per cent of GDP; revenue-GDP ratio above 20per cent; investment 40 per cent of GDP, 100 per cent digital economy and science and technology-based literacy has been planned.
Healthcare will reach everyone’s doorstep. Most importantly, a society based on justice and equality will be established in a Smart Bangladesh. The ambition is very much appreciated and based on this, different development indicators have been fixed.
Investment growth targeted at 33.8 per cent of GDP for which Bangladesh will require BDT 16 trillion new investments. However, the recent data of Bangladesh Bank shows a negative trend of capital machinery import in the recent quarter. Clear policy statement to meet this targeted investment is not clear in the budget. For individual, investment target has been fixed at 27.8 per cent of GDP in 2024 which was 21.8 per cent in 2023. Private sector investment remained hesitant because several economic issues, high conversion of US Dollar. The Budget targeted Taka/Dollar ratio at 104 in 2024 which is 108 (up to May 31).
In the Budget there is no such important measure to control inflation which is the primary and number one concerns among marginal people. The inflationary situation has been deteriorated over the current fiscal. Bangladesh Bank has initiated a quantitative tightening by increasing the repo rate for adjusting excessive money from the economy but it did not work as the price adjustment mechanism of necessary products has not been set and declared.
The amount of budget deficit has been targeted to 5.2 per cent which was 5.02 per cent of GDP in the last year. Loan from foreign sources is 22.89 per cent higher, amounting to Tk 1.02 trillion which was Tk 0.83 trillion in the last year. One of the concerns is that loan from banking system targeted to increase 14.78 per cent to Tk 1.32 trillion which was 1.15 trillion in the revised budget of 2022-23. It seems that both budget deficit and loan from banking system have been increased at a substantial amount.
Marginalized people who are the significant proportion of the population of the country have not got enough attention in the proposed budget. A recent study of Bangladesh Institute of Development Studies (BIDS) shows that a good number of new poor are included in the class of marginalized people while poverty rate is in the fall. Allocation for safety net programmes (SSNP) in the budget for the next fiscal year has been raised by 11 per cent from Tk 1.13 lakh crore to Tk 1.26 lakh crore which is 16.58 per cent of the total budget and 2.52 per cent of the gross domestic product, however, not clear how much actual amount is meant for the marginal people.
In the budget of 2021-22, it was seen that out of Tk 39.63 billion, old age allowance was only 8.69 per cent while pension for retired Government employees and their families was 67.34 per cent, and for freedom fighter it was about 13 per cent. Allowance for widow and destitute women was 3.77 per cent, allowance for financially insolvent was 4.59 per cent, for transgender it was 0.12 per cent. Special earmarked allocation for marginal people could give some attention.
Budget announced for increasing the monthly allowance for the elderly from Tk 500 to Tk 600 and for the widowed, deserted and destitute women from Tk 500 to Tk 550. The number of beneficiaries in both categories has been increased by 1 lakh, taking the total to 58.01 lakh and 25.75 lakh respectively. Though the monthly allowance for people with disability remains the same at Tk 850, the number of beneficiaries has been proposed to be increased from 23.65 lakh to 29 lakh. In calculating, the beneficiary proper better care would need to be taken on the updated database and the new poor and hard core poor.
Budget has mentioned about special needs of ethnic minorities and informed that transgender students are being engaged in all activities side by side with general students which is good news. Announcement for a Gender Roadmap, 2020-2030 for gender-based activities of the Department of Inspection for Factories and Establishments is another praiseworthy steps. The number of transgender beneficiaries will increase from 4,815 to 6,880 and the number of special beneficiaries will increase from 2,600 to 5,620. It seems the budget has initiated various programmes to enhance the quality of life for marginalized communities, including beggars, tea workers, transgender individuals, and other socially excluded groups.
Ceiling for third gender tax payers has been raised to Tk. 4 lakhs and 75 thousand which was earlier Tk. 3 lakhs and 50 thousand. The income tax-free threshold would be increased for parents or legal guardians of physically challenged child or dependent by Tk 50 thousand for each child/ dependent. These are all good initiatives, however, minimum tax of taka 2000 for having any sort of government services will offset these benefits for which all service takers will have to show the proof of income tax certification.
Types of marginal people need to be defined clearly, people such as; poor tribal people, climate migrants, street dwellers, rural private sector school teachers, disable persons, adibashi, framers, workers of transport sector etc. can also be categorized as marginal people.
The 8th Five year Plan has mentioned about a strategy for marginalized group (p845), while in the 7th FYP also there were plans for Dalits and sex workers. A number of arrangements for marginalized people has been announced in the plan, steps taken in the budget if can be aligned with the 8th FYP can be more helpful.
It is seen that the word marginalized covers different types of people, and in order for an inclusive society they cannot be left out, a clear answer would need to come up who do we mean as the marginalized people in the country. A clear definition for marginalized people need to be announced so that people who are socially and economically excluded from their society living under a different socio-economic status, with specific ethno-cultural identity, age or other stigmatized identities, forced by mechanisms of oppression, patriarchy or stigmatization through the means of economic, psychological and social aspects are included.
In income tax schedule, there is a separate mention for women, old age people, third gender people who are receiving some extended exemption while submitting income tax return files. There is an income tax rebate for the companies employing certain percentage of marginalized and dis- advantaged people. Presently, it is allowed only for 3rd Gender, it can be extended for all marginalized class of people. There is a VAT exemption of up to TK 70 lakhs turn over for women entrepreneurs who are conducting small scale businesses, a separate slab can be announced for marginal people.
In-country returnee migrants and MSMEs especially in Southwest Bangladesh need special attention. A brief study of BUILD shows that they cannot afford a very small amount of land because of collateral. Those households which have access to some small assets such as a pond or an auto van often needed some stopgap cash support to activate the income generating activities, e.g. through purchase of fish fries or battery for the auto van. Because of COVID, they have lost their jobs and could not get back to the earlier situation.
Support for marginalized people have different dimension, Budget 2023-24 has announced a number of initiatives, full implementation of these steps and a clear definition and updated database will help to reach the target group.
The writer is CEO of BUILD a Public Private Dialogue Platform. She can be contacted at [email protected]