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9 June, 2018 00:00 00 AM
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The budget

The budget

The finance minister proposed the largest ever budget as has been expected. Apparently it seems that it is a populist one targeting the national elections which are supposed to be held in December this year. In that direction, it has loosened its grip on VAT and reduced nine truncated VAT rates down to five rates. That is not the point here as the ruling party in an election year will not do any different and it will use the budget at its advantage.

But the point here is whether the targets set in the budget could be accomplished. The finance minister declared the budget outlay at Tk 4,64,573 crore, with deficit standing at Tk. 125,293 crore which is 4.9 per cent of GDP, also an increase from the last year’s 4.76 per cent. Apart from the external resources, the rest of the money for deficit will come as borrowings from banks and national savings schemes. But the country’s banks themselves are having liquidity crisis and in this situation how far they could be able to help the government is a matter of big question. Still, helping the scam-hit state-owned banks through bail-out funds as proposed in the budget is also a questionable step.  

But the budget is actually not a populist one. Keeping the tax-free income to the previous year’s Tk 250,000 should not come as a surprise as it has been for many. But the tax exemption threshold should have been higher this year, because prices of almost everything have gone very high and a person with Tk. 250,000 annual income can only marginally be able to meet his expenditure. This is really an irony. On the one hand, the government is touting that people’s income has increased but it is taking away money from their hands as taxes on the other. In fact, the people in the lower tiers of society could not save their money. Moreover, as small-size flats would be costlier because of imposition of VAT, this budget is also not friendly for those who want to solve their problem of housing through owning a small flat.   

What really has come as a surprise in the budget is slapping 5 per cent supplementary duty on banned plastic bags and polythene production. Didn’t the finance minister realize that charging duty on banned items is rather absurd? The freakish charging of duty on polythene would not help the country environmentally anyway.   

While an increase in the health budget is a good sign, this year also the finance minister has ignored the importance of education in national life as allocation for the sector declines 1.19 per cent from the previous year’s. It is rather sad that country’s policy makers have consistently failed to understand that educating the people is itself a great step of development.

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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