Smarter, not bigger budget needed

The next budget should be smarter, not just larger in amount as before, said the Bangladesh Jamaat-e-Islami yesterday.

Previously, the budgets progressively increased in size but quality spending was not ensured, said AKM Waresul Karim, dean of North South University’s School of Business and Economics.

State institutions such as the Bangladesh Bureau of Statistics began manipulating statistics to create a hollow narrative of development, he said in his keynote paper on Jamaat’s expectations from the budget at a view exchange event.

Jamaat believes the main obstacle to the country’s development is its governance failure, which bred endemic corruption, nepotism, cronyism and record levels of sovereign debt.

The real gross domestic product growth maybe between 4.8 percent and 5.5 percent and may steady at 5.5 percent to 6 percent in the medium term. Inflation will hover around 7.5 percent to 9 percent in the medium term.

Unless Bangladesh succeeds in job creation and output growth, it would be impossible to bring inflation down to less than 7 percent over the next decade.

Export growth could remain moderate at 5 to 7 percent, while remittance growth may settle at around 7 percent to 10 percent.

The exchange rate may remain under pressure, ranging between Tk 120 to Tk 125. However, if inflation does not remain under control, the exchange rate may get worse and could exceed Tk130 in the medium-term.

The revenue-GDP ratio will increase gradually from the current 6.8 percent but not dramatically in the absence of reform and reconstruction of the National Board of Revenue, full digitalisation, anti-tax avoidance drives and a wider tax net.

Unemployment and the rising cost of living constitute the two biggest economic problems facing the people and Bangladesh’s economy. Bringing down the sovereign debt and defaulted loans are the two biggest economic challenges facing Bangladesh, he added.

The government needs to take stock of the critical state of the economy, said Towfiqul Islam Khan, additional director of research at the Centre for Policy Dialogue.

Ensuring the quality of spending, as proposed by Jamaat, cannot be ignored, he said, while suggesting the leaders of the party go for the cut motion in the parliament in some areas of the budget.

The opposition party wants to help make the government’s budget and the economy more robust, said Mia Golam Parwar, secretary general of Jamaat.

Jamaat has already organised 7-8 pre-budget discussions and the recommendations obtained will be summarised and presented in the parliament through the party’s parliamentary group.

“The nation should know what kind of budget we envision -- it is with that goal that we want to participate actively in the budget process,” he added.

The people want to see a reflection of the aspirations of July in the upcoming budget, which would be the first by an elected government after the mass uprising, said AHM Hamidur Rahman Azad, assistant secretary general of Jamaat.

He called for an equitable and self-reliant budget without increasing debt dependency or imposing additional taxes on the people.