3 June 2023, Sat, 6:47

Acting Secretary General expresses his reaction to the declared budget

The budget is extremely ambitious; this budget with a high deficit will not bring good results for anyone

- Maulana ATM Masum

Finance Minister AHM Mustafa Kamal placed a highly ambitious budget of Tk 7.60 trillion (760,000 crore) in the parliament on 1st June for the fiscal year 2023-24. Bangladesh Jamaat-e-Islami’s Acting Secretary General Maulana ATM Masum issued the following statement on 3rd June 2023 in regard to the declared budget.

Finance Minister AHM Mustafa Kamal placed a highly ambitious budget of Tk 7.60 trillion (760,000 crore) in the parliament on 1st June for the fiscal year 2023-24. It is basically a loan-based budget. The title of the budget speech is given as "Unnayner Agrayatra Periye Smart Bangladesher Abhimukhe" (Towards a Smart Bangladesh after the march of development). This budget highlighted on developing smart citizens, smart economy, smart government, and smart society. The budget put the highest emphasis on curbing inflation, creating employment, agriculture, health security, human resource development, and education. But this is far away from the real situation. The growth rate is stated as 7.5% and 5.% of the GDP is relying on the deficit. Inflation has been pointed out in this budget at over 6%. The proposed budget and its target growth rate is impractical and fictitious. There is a huge gap between income and expenditure. It has given extra facilities to the rich communities and at the same time, unbearable taxes have been imposed on the poor people. According to the CPD, it is a budget of bizarre. Actually, with this budget, Awami League is trying to overcome the upcoming election which is crucial for them.

The proposed budget sets the ADP of 2 lakh 63 thousand crore taka. the government has set an overall revenue collection target of Taka 5,00,000. The original revenue collection target by the revenue board in the outgoing fiscal year was Taka 3,70,000 crore of which one lakh 11 thousand crore taka was supposed to come from the export-import sector, one lakh 36 thousand 900 crore from value-added tax (VAT) and one lakh 22 thousand and one hundred crore was supposed to be collected from the general tax.

But against this target, only 75 thousand crore taka came from the export-import sector, 98 thousand crore taka from VAT, and around 80 thousand crore taka were collected from the general tax. while the authority became able to collect only 2 lakh 4 thousand crore taka in the first 9 months of the fiscal year which is TK one lakh 26 thousand crores less than the actual target. To meet the set target, the revenue board has to collect almost TK one lakh 26 thousand crores in just 3 months, which is just impossible. So, there is a clear deficit and failure in all sectors.

The proposed budget has set a budget deficit targetting Taka 2, 57, 885 crore, and without a grant it would be 2,61, 785 crore taka. To meet the deficit, the government will take a foreign loan of one lakh 2 thousand 490 crore taka. In the previous fiscal year, the target of collecting foreign loans was worth of 95 thousand 458 crore taka. Along with this huge foreign loan, the government has raised its target of borrowing Taka 1,32,395 crore from the banking sector. 5.2 of the total GDP has been identified as a deficit. So, a major portion of the budget will be spent on paying loans.

The next budget for FY23 aims to attain a GDP growth rate of 7.5 percent. The GDP of the previous fiscal year was 7.2 percent even though that could not be achieved. The health structure of the country is almost broken. There is no sufficient equipment and technology in the hospital. People die often because they are not getting proper treatment. Under the circumstances, the proposed budget allocates 38 thousand 52 crore taka which is 5.9 percent of the total budget. We are of the view that at present, the allocation for the health sector should be at least 10 percent of the budget.

35,374 thousand crore taka has been allocated for the agriculture sector. Agriculture is the key source of Bangladesh’s economy. But the reality is, that the farmers never get their due prices. Production of paddy is higher this year than the previous year. But the farmers did not get their due price once again. The proposed budget says nothing about curbing the price of agricultural materials. Other important issues like reducing the price of the fertilizers, and ensuring exact prices for the farmers did not get focus in this budget.

The industrial sector is another important field for the economy. It is preserving foreign currencies. But because of the unavailability of energy, industrial production has been affected severely. More than 30 million people are involved in the SME sector in particular. But the proposed budget failed to appreciate this sector. The proposed budget also hinted at raising taxes for the housing sector which will put the sector into deep crisis again.

The proposed budget allocates 11.57 percent of the total budget for primary, secondary, and higher education and simultaneously for Madrasa and vocational education. The allocated amount is 88 thousand 162 crore taka, which was 12.01 percent in the previous fiscal year and the allocation was 81 thousand taka. As per the recommendations of UNESCO, almost 6 percent of the budget should be allocated to the education sector only. But this budget allocates only 1.76 percent for the education sector.

After several years, the government has increased the tax-free income ceiling for individual taxpayers up to Taka 3 lakh and 50 thousand. But under the current context, it should be a minimum 4 lakh. From all perspectives, the government has increased the ratio of income and expense but they did not raise the tax-free income ceiling which is not a justified decision. The budget proposed that individuals who are required to submit income tax returns to avail of various government services will have to pay a minimum tax of Tk 2,000 even if they don't have taxable income. Registered taxpayers have to file income, expenditure, and wealth statements and get proof of submission of returns to enjoy 38 types of services. Even the insolvent and middle-class people have to pay these taxes to avail of the services. It will discourage people to submit tax returns.

The budget for 2023-24 fiscal year failed to give any directives to bring back the money which has been laundered in foreign countries. We firmly believe that the countrymen are the real owner of the laundered money. So, the state has the responsibility to deposit it in the state fund. The vested quarters who had embezzled or laundered money to foreign countries must be brought to the book by the Anti-Corruption Commission immediately.

The labor’s contribution to the economic prosperity of Bangladesh is undeniable. But to preserve and protect their health security, there is no word in the proposed budget. We think that the budget should have special arrangements to secure labor’s health, accommodation, and health insurance.

Overall, effective good governance, transparency, and accountability are a must to tackle the global recession and also to rescue Bangladesh from the existing economic crisis. In words, this loan-based budget will not bring welfare and a good message to the people.