We have observed few decisions of the government during different budgets which raised concern among the economists as well as the people. But with a new Finance Minister in line for his orientation of budget presentation, we can just hope for a budget which addresses most of the people’s issues existent in today’s Bangladesh.
Finance Minister AHM Mustafa Kamal has already held pre-budget discussions with economists and others to gain and share insights on the budget preparation phase. As advised by Prime Minister Sheikh Hasina, he was also supposed to discuss various issues with his predecessor, AMA Muhith, who placed his last and 12th budget as finance minister in last calendar year. Fresh from being elected to its third term, the Awami League government has planned an ambitious budget to fast-track implementation of the mega projects announced in its previous terms. Till now, it is evident that the mega projects will be allocated necessary budgets for completion as from different forums that budget was already discussed and fixed.
The upcoming budget for the fiscal year 2019-20 should have directives for recovering the undisclosed or black money as it is a sensitive issue for our economy as well as our country. As per estimation from unpublished government data, there are about BDT 5 to 7 lakh crore undisclosed money in the country, which is even larger than our one-year budget. We need to recover this huge amount of money. It will be important to maintain that this recovery process should not drive honest people to get tangled with dishonesty.
The upcoming budget should clearly indicate and incorporate the process of resolving the issue of this undisclosed money. The upcoming fiscal year should realize at least a portion of the total black money which can be very important in increasing our economic capacity. This undisclosed money is also pushing towards money laundering which gives birth to different crimes and even financing of terrorist activities. Every year about BDT 70,000 to BDT80,000 crore is being laundered. We, from general viewpoint, may not realize the deep impact of things like money laundering though it can push us in a very uncomfortable position in global forums. NBR should significantly contribute in monitoring and checking money laundering to realize a portion of that undisclosed money in the upcoming budget.
The upcoming budget would be the first for the new government formed through the 11th parliamentary polls. Hence, the budget should keep instructions or plans on how the government’s 21-point manifesto including village turning into city and turning youths into manpower would be achieved. Few important areas that should receive focus in the upcoming budget can be identified as ensuring high economic growth, reducing multidimensional inequality, making skilled youth, taking global opportunities and initiatives for home-grown development. These are the cores to make our revenue policy more people oriented as it should be for the welfare of people as it inherited in our constitution. The fiscal policy must be designed in a way which would help reducing poverty while lessening dependency on foreign aid, which has been a trait of budget even after so many years of independence.
While the budget focus mostly on industrialization and promoting modern technology, the agricultural sector should receive high focus. Our farmers are being deprived. They are not receiving proper price for their products. They are burning the crops as they are not being able to pull out their investment. They sell their grown agricultural products in a very low price though the consumers are buying that in a very high price. The middlemen are taking away all the money due to huge corruption throughout the country. At last, both the producers and consumers are at grave loss. Rather than, giving concessions and facilities to the farmers in the form of both financial and non-financial support, the budget should portray some action plans to reduce the influence of these middlemen and that will help the people all around Bangladesh. The budget should not keep any provisions for corruptions to be integrated in our system.
During the last few years, our local industries have boomed as many entrepreneurs are coming forward with different ideas and inspiration. Female entrepreneurs have also been a major contributor behind this growth. NBR should increase duties on imports of foreign products and decrease taxes on locally produced goods to promote local industries. If we cannot create scope for these entrepreneurs, then our economic welfare will not be achieved as dependency cannot be reduced without helping out own industries. Our policies must create scope for our entrepreneurs to grow as many countries of the world have changed their economy by accommodating the local business owners.
The budget must emphasize of collecting direct taxes rather than indirect revenue and should exempt poor people from taxes and revenues should be collected from the rich. The tax exempt income should be set at BDT3.5 lakh from the next fiscal year. From 2015-16 to 2018-19, the tax exempt income limit was set at BDT2.5 lakh. During the same time period, 22.59 per cent inflation was recorded. Hence, the cost of living has increased a lot during the last few years and a person who has taxable income of BDT2.5 lakh is actually fighting for his or her existence and a tax upon him is just an inhuman burden. So, at personal level, income tax slab should be revised as a must. The number of large taxpayers should be five-times more than recorded as the rich should not be allowed any chance to avoid taxes.
The budget should have some focus on improving the securities market. For any economy to perform well, an effective securities market is very important as it provides businesses to opt for growth while providing opportunity to personal growth of wealth by legitimate investment. Hence, it has multidimensional impact. The securities market of Bangladesh has become a pit hole. Despite strong efforts, the market is non-performing and all the investors surrounding this market are having a hard time to accumulate any profit. Large investments were turned into complete losses. But one thing is to be realized that the money stays somewhere and it is only vanished from the investors’ pockets. Hence, uncorrupt monitoring over this market is very important while few steps should be taken to rejuvenate the capital market.
Opportunity to turning black money into white through the securities market should be initiated though there are several global regulatory bindings.
But we should look for some opportunity to bring this undisclosed money to revive the capital market. Corporate tax reduction by 5-10 per cent is highly required also not only for the capital market related companies but also for those who operate independently outside the influence of capital market. The policy of AIT (Advance Income Tax) deduction at source should also be revised to boost the business of the capital market intermediaries.
Few important fiscal decisions can also help the securities market to perform on a higher scale. The interest rate of borrowing from bank should be single digit. Though the government had earlier issued such directives to banks but we are yet to see that realized in any banks. If it is done, the capital market might see some boost. Moreover, the tax rebate on capital market investment should be a great instrument to make people interested in investment in shares of different listed companies. Whatever the case is, for our economy to perform well, we should take strong steps to revitalize the capital market.
There are many other aspects of the upcoming budget only a few were brought into lights here. But out of all the discussions, opinions of economists, intent of politicians, insights of the government – we just expect a budget which will be mass-oriented. The budget should think about both the poor and the rich. We cannot save the poor by strangling the rich and it is vice versa. But the main thing is eliminating corruption from the very beginning. Wherever we allocate the budget, that budget should be properly used to drive people’s welfare.
The new Finance Minister has declared that the budget will be short and easily understandable to people this time. He also mentioned many surprises in this upcoming budget. We just hope that the surprises do not contain any elements of increasing costs in our daily lives as we are already finding it difficult to maintain our lives with our honest incomes. We wish this budget of 2019-20 will only provide us opportunities to grow and the whole Bangladesh is eyeing on that.
The writer is Chief Editor at Mohammadi News Agency (MNA), Editor at Kishore Bangla and Vice-Chairman, Democracy Research Center (DRC)