Experts for rise in social safety net allocation

As natural disasters like flood has posed another challenge right now experts on Sunday suggested that the government should increase the social safety net allocation from the current level to a reasonable amount.

They made the remark at the MCCI-PRI Post-Budget Discussion titled ‘Bangladesh from Vulnerability to Resilience and Rapid Inclusive Development’ at MCCI auditorium in the capital.

Speaking at the programme, Chairman of Policy Research Institute of Bangladesh (PRI) Dr Zaidi Sattar said the current challenges like inflation, debt and deficits should be addressed in the budget for the FY23.

The economist also added that this budget should also be seen as part of the long-term vista of Bangladesh’s development.

The macroeconomic and fiscal framework presented in the budget reflects a continuum of the prudent macroeconomic management that is the foundation of stability and growth in spite of the external challenges from global developments.

“However, by the end of the FY23, we expect the Bangladesh GDP to cross half a trillion US dollars with per capita income more than 28 times what it was in 1972.”

The march to the LDC graduation in 2026 should continue despite the onslaught of the Covid-19 pandemic and the impacts of the Russia-Ukraine War, he added.

The PRI Executive Director Dr Ahsan H Mansur said the budget of Tk6, 78,064 crore would be a challenge for implementation and the target of revenue collection would be another challenge for the NBR.

“However, allocation in social safety net and agriculture should further see an increase given the current situation. Besides, unnecessary expenditure should be discontinued and tax measures should be reformed,” the economist explained.

He also spoke on pension, trade services, salaries and wages for private job holders.

President of Metropolitan Chamber of Commerce and Industry (MCCI) Md Saiful Islam said there had been an increase in the allocation from Tk1,07,614 crore in the FY22 to Tk1,13,576 crore considering the twin affects of the Russia-Ukraine war and the Covid-19 pandemic.

“Moreover, natural disasters such as floods which we are going through right now will also be another challenge for the country. Hence, we are suggesting increasing the social safety net budget from the current level to a reasonable amount,” he added.

Siaful said personal income tax thresholds had remained unaddressed, which should have been subject to changes, especially with the tax-free threshold.

Considering the increase in per capita income to $2,824 the personal income tax threshold should be increased to Tk400, 000.

MCCI President said the government’s allowing whitening of black money with no questions by simply paying a certain amount of tax would discourage the honest entrepreneurs and citizens.

The Chamber will be happy to see crypto assets being allowed for investment as those will create more jobs in the country, he hoped.

Presenting key note paper, economist Dr Abdur Razzaque underscored the need for urgent and dedicated fiscal support measures for the education sector and improving food security for the urban poor.

Chairman of MCCI Tariff and Taxation Sub-Committee Adeeb H Khan said, “We appreciate the government’s lowering the corporate tax rate for both listed and non-listed companies but the conditions set for those lower rates may be difficult for the most businesses to meet.”

State Minister for Planning Ministry Dr Shamsul Alam said the government is working to reduce tax-to-GDP ratio.

“Considering economic benefits, the government has allowed the undisclosed money for whitening to bring the money back into the economic main flow.”

As the chief guest, Planning Minister MA Mannan said as the inflation is now global issue the government provided subsidy to agriculture for food security.