Home ›› 04 Jun 2023 ›› Front
The government will have to implement comprehensive reforms to achieve the revenue target under the proposed budget for FY24, said former governor of Bangladesh Bank Dr Atiur Rahman.
He made the remark while presenting a keynote on proposed budget for FY24 through video conference, held at the Unnayan Shamannay in the city’s Banglamotor area on Saturday.
The economist also underscored the need for a social movement, which can be particularly helpful in building a tax-paying culture in the country.
Dr Atiur pointed out, “Achieving the envisioned ‘quantum jump’ in revenue collection will require revolutionary reforms. Overall, the tax proposals seem sensitive to reality.
“Many citizens will get some relief from the pressure of inflation as the tax-free income limit has been increased from Tk 3,00,000 to Tk 3,50,000. The provision of mandatory Tk 2,000 return for the non-taxable TIN-holders may contribute towards building a tax culture in Bangladesh.”
He added that the move may also be helpful in increasing revenue generation and promoting tax paying culture. There is no alternative to balancing the budget and monetary policy to protect citizens from inflationary pressures.
Dr Atiur expressed optimism that all stakeholders will try to keep this balance and move forward throughout the financial year.
Also the chairperson of Unnayan Shamannay, Dr Atiur said, “Inflation has two sides – supply and demand. The government should give more importance to the supply side to ensure supply of essential commodities across the country to tackle inflation.
“The Bangladesh Bank should relax monetary policy to reduce the demand side.”
He added, “In the context of macroeconomic stress, budget implementers should plan on redistributing resources to higher priority sectors – such as subsidies and social security – by cutting expenditure in certain sectors.
“This year’s budget has announced the start of Smart Bangladesh’s journey by safeguarding the continuity of inclusive development, while confronting multifaceted macroeconomic pressures.”
He further said, “Many people think the budget is ambitious but we do not think so. It can be characterised as an optimistic and reform-oriented budget.
“It must be acknowledged that there are many challenges in the way of implementing the budget targets. But in the existing reality, we feel there was no option to go ahead with such a bold plan.”
Dr Atiur continued, “Whether the 7.5 per cent growth target can be achieved is debatable. But now is not the time to debate growth. More policy attention is needed to control inflation, as it has exceeded 8 per cent this year.
“Therefore, the target of maintaining inflation at 6.5 per cent in the coming year seems challenging. But this target cannot be called unrealistic. Product prices are stabilising in the world market.”
About the budget deficit, Atiur said, “There is a Tk 2,61,785 crore budget deficit in the proposed budget, which is 5.2 per cent of GDP. Fifty-one per cent of this deficit will come from the domestic banking system. There will be pressure on the credit flow to the private sector.
“We want to ensure that whatever credit flows to the private sector goes to productive and employment-oriented initiatives. For this, coordination of budget and monetary policy must be ensured.”
Eminent sociologist and Unnayan Shamannay’s Emeritus Fellow Khondoker Shakhawat Ali chaired the budget reaction session. On June 1, Finance Minister AHM Mustafa Kamal placed the proposed national budget of Tk 7,61,785 crore in parliament.
