The government has announced a balanced, optimistic and reform-oriented budget for the next fiscal year 2023-24 to ensure sustainable economic growth.
The statement was made by Dr Atiur Rahman, former governor of Bangladesh Bank and chairperson of Unnayan Shamannay.
This year's budget has announced the beginning of the journey of Smart Bangladesh by safeguarding the continuity of inclusive development by confronting multifaceted macroeconomic pressures, he mentioned.
He made the statement while presenting the keynote paper at Unnayan Shamannay's press conference arranged to review the proposed budget for FY24, held at the Khondoker Ibrahim Khaled Conference Room of the organization at Banglamotor in the capital on Saturday.
Eminent sociologist and Unnayan Shamannay’s Emeritus Fellow Khondoker Shakhawat Ali chaired the session, while the organization’s Lead Economist- Robart Shuvro Guda, and Senior Research Associate- Shahnaz Hira were present as Panel Discussants.
Atiur said many people think the budget is ambitious but we do not think so.
“There are many challenges in the way of implementing the budget targets. But in the existing reality we feel there was no option but to go ahead with such a bold plan. The size of the proposed budget is more than seven and a half lakh crore.
The budget has increased by 15.33 percent over that in the previous year. And the revenue collection target increased even more by 15.47 percent. Achieving the envisaged 'quantum jump' in revenue collection will require revolutionary reforms,” he mentioned.
He said more policy attention is needed to control inflation as inflation has exceeded 8 percent this year.
“Therefore, the target of maintaining inflation at 6.5 percent in the coming year seems challenging. But this target cannot be called unrealistic. Because the product price is stabilizing in the world market,” he added.
Dr Atiur argues that the Tk 5,000 billion revenue target and the intention of containing inflation within 6.5 percent- both are challenging. Yet, there was no alternative to taking this challenge, he opined.
He further added, “Coordination between fiscal and monetary policy is of critical importance to ensure macroeconomic stability.”
While presenting the keynote Atiur pointed out that the budgetary initiative to raise the tax-free income ceiling from Tk 3,00,000 to Tk 3,50,000 may be expected to ease the burden of some citizens already under pressure due to inflation.
However, certain other tax proposals such as- raising the property tax limit for the rich from Tk 30 million to Tk 40 million, increasing tax on foreign trips of workers and students- should be reconsidered.
Dr Atiur believes- the provision of mandatory Tk 2,000 return for the non-taxable TIN-holders may contribute towards building a tax culture in Bangladesh.
However, he warned that this must not be used as a tool to harass potential taxpayers.
Robart Shuvro Guda pointed out that in the proposed budget- no allocations have been made for new social security programs and emphasized on the demand for initiating new programs in both rural and urban areas.
He further pointed out that at present- of the total beneficiaries of the social security program, only about 25 percent belong to the lowest income group.
Shahnaz Hira said that not increasing health budget allocations citing lack of budget implementation efficiency as an excuse is increasing the out-of-pocket health expenditure.
She suggested through increasing allocations for free-of-charge medicine supply and for employing health professionals at rural healthcare facilities, the government can reduce the out-of-pocket health expenditure of rural primary health care-seekers from 68 percent to 50 percent.