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Pre-budget discussions: fixing the priorities May 30, 2008

Posted by bdoza in BANGLADESH, Budget, ECONOMY, GOVERNANCE.
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Budget will be declared within weeks. Pre-budget discussions is on in full swing. There are articles in the papers, discussions, interviews, video conferencing, meeting at the grassroots levels and seminars in the circle of the literates and round table discussion with the editors and intellectuals. The meetings at the grassroots level organized by Shayeek Siraj of Channel Eye is a remarkable inclusion. He started the discussion much earlier and even presents the recommendations of these meetings to the Advisory Council and to the Chief Adviser. I also enjoyed the live video conferencing organized by FBCCI in the presence of Finance Adviser and business leaders of Bangladesh simultaneously from two venue – Dhaka and Chittagong.
One of the main objectives of all these exercise is tofix the priorities. After 2 floods, cyclone sidr and price hike of essentials and shortage of stocks of grains, there should be no doubt that ensuring food security will get the top priority and agriculture will give due share in the coming budget.
As one said in the video conference that our budget should be investment-oriented, not tax oriented. So necessary environment should be created for better investment in the country.

Our tax system should be more rationalized. Tax return should be more simplified. What is simplification means to a tax payer? Simplification means return of tax payment without third party involvement (the lawyer or the insider). NBR chief said before few weeks that it is introducing online tax payment. They should also develop software for auto calculation of tax figures on the basis of Bangladesh tax cuts. How the state is recognizing a tax payer from a non-tax payer in general? Tax payer should be given benefits in various ways in our financial system, one may be to get the bank loan on the proportion of tax payment. VAT should be used judiciously. Unnecessary harassment should be avoided by the system. A doctor was saying that government is using physicians to collect VAT from the sick persons. These VAT from sick people should be cancelled.

Present financial adviser has a tendency for big budget. But what is the utility if the targets are not achieved? One is the area where the government failed miserably is the implementation of ADP.- only 25% was found implemented after 6 months of present financial year and at the end of the year it is just over 50% and we know the quality of work when it is done under special directive at the end of the financial year. In our government service, there is little scope of evaluation of performance of an officer or individual. So nobody feel the compulsion to finish any target fixed on him. A proposal also came out from the video conference of FBBCI that private-public partnership may be developed to implement the projects. Dr. Muhammad Yunus has own way of thinking to alleviate poverty by incorporation of the local people in the process of building a project, giving them the responsibility to maintain it (such as a bridge) and thus support the people of the area in future.

Our revenue earning is close to 50000 in crore. But most of this is lost in capital cost- in maintaining the government machinery. Government should slim itself and cost in the capital head should be lessened in this era of technology and automation. The money saved in thi sway many be ulilised to generate employment. Many praised the pro-poor steps taken by the government in the post flood and post Sidr condition. We hope that government will continue this policy by giving more emphasis on employment generation for the poor especially in the economically affected area.

Our education budget should also be directed to produce skill manpower rather than certificate holders. Traditionally we are more directed to keep our children in the colleges and universities for longer lengths in general education. This trend should be changed and technical education should be encouraged. A certain level of technical education also should be incorporated in our primary and secondary education, so that students after coming out of these level , know not only writing and reading and also know some skills for his livelihood. Computer education should be included as early as possible in the school years. A basic know-how of computer should be learnt by our every secondary school children.

For developmental budget, we are to borrow money from the foreign financial houses like ADB, IMF, Word Bank. Why we are to depend on foreign financial assistance when the finance adviser said that we can borrow money from our capital market?
One of the common concepts is that in national budget, expenditure always remains higher than the income and the gap is covered as loan from internal and external sources. which is reverse for domestic budget. The concept is actually nourished by international financial houses to keep the developing nations always dependent on them. The concept was challenged by Center for Policy Dialoge. We also believe that a middle class man with no borrowing from the banks is better off physically and mentally than a ‘rich man’ with huge borrowing from the banks. There is no rationality for the governments to keep a nation in dept to foreign money lenders.

One was saying that the government should make five year budget rather than one year plan. But as this government’s tenure is about to over, let the task be kept for the coming elected government.

An ordinary citizen


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