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Bangladesh Budget 2011-12: Reactions and Analysis June 16, 2011

Posted by bdoza in BANGLADESH, Budget, ECONOMY.
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Risk remain in implementation- Muhith
Big budget meets political demand:Dr.Wahiduddin Mahmud
Budget out of sync with Al manifesto
Medicare at stake
Financing budget is a major challenge: MCCI
FBCCI warns of liquidity crisis
Black Money whitening- Muhith defends, CPD opposes
Bourses urge govt to reverse tax plan for brokers
Subsidy cut to upset agriculture
No stimulus for RMG export
Budget lacks clear focus
Hefty govt borrowing to hurt private investment:CPD
Budget bypasses vision for Digital Bangladesh: Say ICT sector leaders
27 budget pledges 2010-11 unfulfilled

Views on Bangladesh Budget 2010-11 June 14, 2010

Posted by bdoza in BANGLADESH, Budget, ECONOMY.
1 comment so far

Big Budget, few new ideas

Budget as the common man sees it

Budget implementation big challange: CPD

An ambitious Budget: Budget Watch

Budget not ambitious :Muhith

Budget industry-friendly

Half of the national budget spent in 9 months

Green budget gets a boost

BEA praises the budget as ‘pro-people’

Farm sub-sectors ignored in budget

Local bodies demand greater share in the budget

Social safely net scheme retained

No relief for middle class

FBCCI sees looming tax burden

[collected for personal reading, others may share-An ordinary citizen]

Bangladesh Budget 2010-11 presented June 10, 2010

Posted by bdoza in BANGLADESH, Budget, ECONOMY.
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I am reading the budget. You can also read it from here before making a comment:

Budget 2010-11 : Complete [English]
Budget 2010-11 Complete [Bangla]

Budget in Brief: Englsh
Budget in Brief: Bangla

Bangladesh Budget 2009-10 and Public-Private Partnership July 17, 2009

Posted by bdoza in BANGLADESH, Budget, ECONOMY.
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Public-Public Partnership is a concept added to the Bangladesh Budget more formally in this financial year.
In the Budget it is said that we need to take our economy to the higher trajectory of growth to take the people of this country out of the vicious cycle of
poverty. What is needed to meet this objective is a paradigm shift to bring qualitative change in the investment strategy.

Mr. MA Muhith, the Finance Minister states that in the Election Manifesto, the growth of GDP has been set at 8 percent to be achieved by the year 2013 and at 10 percent by the year 2017, which would be sustained until 2021. As a vehicle to attain this higher
growth, investment in infrastructure development, especially, power and energy, ports, communication, supply of drinking water and waste management, education and health will be given highest priority. A huge investment is required to achieve this target. In addition to the existing public and private investment programmes, an investment of US$ 28 billion will be required by FY 2013-14 to achieve the projected growth as per the preliminary estimates.

The Budget argues that the government alone cannot provide such huge amount of resources. It would be difficult to maintain macroeconomic stability if the government has to finance such huge investment by borrowing from domestic sources. Again, it will not be
possible to obtain such funds as concessionary loans from the development partners. Our past experience suggests that it has been difficult to ensure economic use of public resources and the quality of service delivery when Government is involved in infrastructure development and maintenance as its involvement is not determined through a competitive market process. At the same time, direct involvement of the government in project execution process takes away the focus from its basic obligation to provide social and other important

Since the implementation and funding of any infrastructure development projects is a long drawn process, the investment risk is much higher and at the same time, the investment is not, in many cases, commercially viable. It is therefore, difficult to attract private investment in all projects in this sector.

In this context the Government is going to take special initiatives to involve the private sector under Public Private Partnership (PPP) to meet the probable investment gap in infrastructure development and maintenance, alongside the government’s investment. FM believe that successful application of PPP
concept will open up the door for increased flow of investment from both local and foreign investors. This will accelerate economic growth. He asserted that PPP in Bangladesh commenced after the adoption of IPP Policy in 1996.

Around 50 initiatives in telecommunication, land port and other physical infrastructure projects have been successful. There has been remarkable progress in PPP sector in FY 1998-99 when initiatives were taken to build two mega power plants at Haripur and Meghnaghat with private sector involvement
for the first time. The two projects were implemented successfully and helped in mitigating power crisis. I would like to mention that the existing PPP framework and the institutions associated with PPP should be more transparent and should also be strengthened to
ensure the success of the PPP sector. At the same time it is essential to ensure the participation of the government in PPP projects.

Budget states that the present government is committed to take timely measurers to attract private investment in the country through PPP. Therefore, Finance Minister proposes to create three new ‘expenditure heads’ in the FY 2009-10 budget to facilitate new projects under PPP.

The first expenditure head will be named as PPP Technical Assistance to cover expenditure related to pre-feasibility studies and other preparatory work before asking the private sector to submit their bids for PPP projects. Relevant agencies will be able to receive necessary funds quickly from this head to prepare PPP
project documents and to appoint PPP consultants. He proposes to allocate Tk. 100 crore for this sector in FY 2009-10.

He also proposes to allocate Tk. 300 crore as Viability Gap Funding as subsidy or seed money to attract private initiatives for the construction of power
plants, hospitals, schools, roads and
highways which are non-profitable but essential for public services.

Budget also allocates Tk. 2,100 crore in the PPP budget to accelerate the process of investment through PPP. This allocation will be used for setting up an Infrastructure Investment Fund. Depending on the type of projects, the Government will provide equity
or loan to the private investors to ensure
Government’s participation. Different financial incentives will be extended from this Fund to encourage investments. We are presenting for the first time a position paper on invigorating investment initiative through PPP.

He added that the challenge before us, is to set up an institution for preparation and implementation of PPP budget which will ensure innovative ways, independent operation and accountability of planning and budget
process of the private sector. We trust that
this body will be able to provide incentives to PPP initiatives in different sectors and expedite project approval process. He hopes that this institution will follow the best practices of modern management philosophy of both public and private sectors.

According to the plan, PPP budget management will
be fully operational by September next.[Source:Bangladesh Budget 2009-10]

An ordinary citizen

Post Script:

In a recent discussion, Professor Anu Ahmed, an Economist of Jahangir Nagar University told that the concept of PPP is an extention of colonialism in modern times. Through PPP multinational companies will be allowed to hold the ownership of the our highways, factoreis, shipyards, seaports etc and through this we shall be subjected to the policy and programmes dicctated by them.

Some other views:

Focus on ADP out, PPP in- Zahid Hussain

PPP initiatives needs to be backed by appropriate policies- speakers at a discussion

A view on Public-Private Partnership-Abu Naser Chowdhury

Bangladesh Budget 2009-10 and Power Crisis June 26, 2009

Posted by bdoza in BANGLADESH, Budget.
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The Budget outlined a long-term vision to solve the gas and power crisis at present and in future, and as part of it proposed an allocation of Tk 4,310 crore for the sector in the next fiscal year (FY). The allocation is 48 percent higher than that in the revised budget for the current FY.

The Budget 2009-10 states that our development efforts are severely constrained by the dismal state of the energy and power sector. We were aware that there was a huge gap between demand and supply in this sector but we did not know that the snag is not only in the supply of gas and generation of power but also in the transmission of power as well. Not only is there a huge lag in the exploration of new gas fields, there has in fact, been serious neglect in taking up new work in known gas fields in order to augment gas supply as well.

The new Government is now compelled to set up expensive dual-fuel power plants that can use diesel or furnace oil and also gas. Energy and power sector demands a comprehensive plan for ordering of power plants, increasing supply of gas and other feed stock, strengthening of power transmission and distribution
facilities, rationing of gas supply to competing demands, finalization of a coal policy and a long term sectoral master plan.

The Government acknowledged that the power deficit is the principal impediment to our overall development including industrialization. The Government is committed to get rid of this impediment. It is said that only 45 percent of our entire population has access to power. Currently our per capita power consumption is only 172 kwh, which is 325 kwh in Sri Lanka, 408
kwh in Pakistan and 665 kwh in India.

The Budget states that, at present, our average power demand is about 5,000 MW, against which as of now the existing power plants can only generate 3800 MW of electricity. The Government is determined
to take appropriate steps to increase power
generation assuming its demand to be 20,000
MW by 2021.

It ascertained that it is not possible on the part of the Government alone to finance huge investment that is dearly needed for targeted power generation. The Government has, therefore, embarked upon involving the private sector in short, medium and long term plans. We want to reach a position to fulfill the minimum electricity demand by 2011.

It states that in the year 2008, there has been an additional power generation of 307 MW in the private
sector. In 2009, 500 MW of additional power will be generated through 4 projects a ubder public sector nas 440 MW will be added from 11 projects under the private sector. It is said that the bidding process for the construction of a 450 MW Bibiyana Power Plant is underway. It is hopes that by 2013, 2810 MW of power will be produces though 13 projects under public sector and another 1350 MW, under 3 projects of 3 power sector including Bibiyana. Besides, the Government is continuing dialogue with our neighbouring countries to import power for mitigating the power crisis on a short term basis.

Alongside increase in the production of power, efforts are under way to ensure efficiency enhabcement of management and efficient use power produced. During the last Boro season, 300 MW power could be saved through power load management. The diversion of this power towards irrigation helped the achievment of a bubper Boro production thi year. The Government also taken up a project at a cost of Tk. 105 crore to produce energy saving bulbs. Once this project is impemented there will be a saving of 350 MW of electricity.
To overcome the problems of transmission and distribution of power, the Government has taken steps to distribute the net addition of power in the next 3 years accross the country. For this an additinal 837 kilometers of power grid line, 17 sub-stations and 15000 kilometres of distributionline will be constructed.

The Govrnmnet believes that the development of rural electrification will play a vital role in our rural economy.

Finance Minister opined that It would not be advisable to avoid power generation using nuclear technology despite the element of risk of accidents involved. He declared that the Government has begun the preparatory work on this matter. However, FM cannot
make any definite statement as to when the nuclear power generation will commence. The Government is considering seting up a GOB-finqnced nuclear power project at Roopur with a capacity of 1000 MW.

Bangladesh is producing 20 MW of electricity by using renewable energy. The Government is encouraging the production of renewable energy by providing various financial incentives through through both public and private channels. Besides, the Government has taken initiative to conduct a feasibility study for setting up small hydro-electricity projects. So far , the use of solar and bio-gas as mainly been tried in rurl areas. The Government is taking initiatives to use this technology in population concentration areas in cities also.

The Government is seriously considering using coal along with gas for power generation. The Government will set-up coal -fired power plant using environment friendly technology for extraction of coal. It said that coal may be imported to run these power plants.

Budget shows hopes in power sector. Let us wait and see how the citizens get relief from their pain from power crisis.

An ordinary citizen

Bangladesh Budget 2009-10 and Digital Bangladesh June 23, 2009

Posted by bdoza in BANGLADESH, Budget, ECONOMY.
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Vision was projected in the introduction of the Budget Speech to develop Bangladesh as Digital Bangladesh by 2021 in line with forcast of the Prime Minister’s declaration in the party manifesto.

For this, Budget attached priority for building necessary infrastructure for Digital Bangladesh. In order to realise the vision of building Digital Bagladesh , Budget asked ICT facillities to those who are living in rural areas. To this end, the Government like to ensure internet connectivity and opportunities for the best use of information and communication technology. It has a
plan to bring the least advantaged communities under the coverage of telephone and internet connectivity by extending its network and reducing the charges. The Government is on the way in bringing all Upazilas within internet coverage in the next five years.
In order to have secured connectivity with the information super highway there is an initiative to
connect Bangladesh with the Second
Submarine Cable Network. It is said that comissioning of digital exchange at Upazilla and growth centres has largely been completed. The remaining ones will be
commissioned in the next year. To facilitate internet connectivity across the country, laying of fibre
optical line will be completed in the next year. At the same time, an access network will be built covering 23
districts including 6 divisional headquarters.
FM pleased to inform that the teledensity in the
country has increased to 32 per hundred from 28 per hundred in the last year. While the internet user density has increased from 3 per hundred to 4 per hundred.

It is said that digital information echnology is widely used in the processing and compilation of budget and
accounts related data and information. It is good that Integrated Budgeting and Accounting System (iBAS) was introduced in FY 2007-08 and with this it is now ensured generation of timely and accurate reports. Currently, 58 District Accounts Offices including the Divisional Accounts Offices are connected through a Wide Area Network. Financial data and information are being sent directly to the capital from remote accounting locations through this system. It is said that in future, this information technology will be expanded further to cover all Upazilas across the country. This process will make public spending and use of resources more transparent and will ensure accountability.

The Budget acknowledged that there is a need to encourage science and technology education to keep pace with global and technological advances. In
order to build digital Bangladesh, the Government want to develop a ICT-skill work force. The Government, therefore, committed to introduce compulsory computer and technical education at secondary and primary levels by 2013 and 2021 respectively.

The concerned ministries are now working on a detailed work plan on the ICT Policy of the Government. The Government wants to transform to e-governance by 2014 and initiate e-commerce by 2012. Bangladesh Computer Association and Bangladesh Association for Software Information Services (BASIS) has been associated for preparing a specific work plan. The Government plans to introduce computerized system in every government office during its term of office and target a benchmark of 4000 computer engineers and scientists graduating each year from the last year of their tenure.

To render better and efficient services to the people
traditional file-based administrative work in the public sector needs to be transformed into e-government/digital government. The
national ICT Road Map is being worked out to achieve this goal. Top priority is given for exporting computer software and developing IT-skilled human resources in the service sector. The Government will
enhance incentives for software industries and also promote the use of indigenous software in government and non-government sectors.

Beyond these, enhancement of opportunities for basic
research relating to science and technology will be one of the most important activities in this area, Budget says.The Government is preparing a comprehensive programme for helping reputed researchers to undertake their research work and scholarly work in science. The Government has doubled the allocation made on research work in mathematics, life-science and physical science. It is said the allocation for this sector will increase further.

Finance Minister proposes to allocate Tk. 100 crore to meet the emergency expenditure in the ICT sector. He also proposes to enhance the amount of the existing Equity Entrepreneurship Fund relating to ICTpromotion
from Tk. 100 crore to Tk. 200 crore.

To introduce automated system of tax collection on modern technology in order to build Digital Bangladesh, it is proposed to provide facilities for 1) submitting online return for income tax 11) for easy availabilty of computers and laptops 111) development of software industry
Budget also proposes to withdraw Vat on the internet service used in educational institutions to keep the service within the reach of students and also to signify commitment towards building Digital Bangladesh.

Budget also said to create separate ICT wing in NBR along with the ICT Commissurate towards building Digital Bangladesh.
Budget hopes that this steps will turn the vision of PM for Digital Bangladesh into reality.

The ordinary citizen/s will wait to see how far the commitments expressed in the budget are materialised and see the light of the day.

An ordinary citizen

Views on Bangladesh Budget 2009-10 June 12, 2009

Posted by bdoza in BANGLADESH, Budget, ECONOMY.
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Following are the views of different individuals and organisations on the Bangladesh Budget 2009-10:

A Carttonist look at the whitening of black money in Prothom Alo

A Cartoonist look at the whitening of black money in Prothom Alo

Mix of progress and protection: Daily Star

Social Safely Net further expanded

A focus on PPP- Zahid Hussain

Mixed reactions among chambers, trade bodies-Daily Star

Noab denounces duty on the newsprint

ADP goal lofty- Mirza Azizul Hoque

Govt bows to black money

Whetening of black money is a political compromise-Muhith

Green beckoning

The first cut is the deepest -Daily Star

Success depends on efficient tax collection(bn) -Mahbub Hussain

Budget implementation -major challenge: Muhith

Budget conservative-CPD

Money -whitening scope sparks debate

An ordinary citizen

Post Script:

Whitening of black money will weaken the tax collection system(bn)-Ahsan H Mansur

‘Kill and come back'(bn) -Anisul Hoq on whitening of black money

Import duty on newspaper-Daily Star editorial

Import duty from Newsprint should be wiped out-Prothom Alo Editorial

Budget proposal misunderstood- Muhith on whitening of black money

Budget ignores ant-poverty efforts

Whitening black money: Scope breach of UN Convention- World Bank

Bangladesh Budget 2009-10 Proposed June 11, 2009

Posted by bdoza in BANGLADESH, Budget, ECONOMY.

Finance Minister AMA Muhith presented the National Budget for 2009-10 in the parliament , the first of the AL-led new government after the general election of 29th December, 2008.

National Budget for 2009-10:
Budget at a glance
Full Version in English
Full version in Bangla

News link:
Daily Star
Prothom Alo

An ordinary citizen

Post Script:
30 June, 2009: Budget passed in Parliament with minor adjustment

Power crisis and Bangladesh budget 2008-09 August 3, 2008

Posted by bdoza in BANGLADESH, Budget, ECONOMY, GOVERNANCE.
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Bangladesh Budget acknowledges that currently 43% population enjoys electricity facilities and per capita electricity consumption is low compared to many developing countries. in 2007, our per capita electricity consumption stood at 140 KWH while it was 325 in SL, 498 in Pakistan and 665 in India.
Currently, our daily requirement of electricity is 4500 MW on an average against our average net generation 3600 MW.
It is said that huge investment will be required to cover the gap of 900 MW which will not be possible on the part of the Government. Government therefore want to involve the private sectors to generate the power in short term and long term basis.
But the frustrating reality is that in this way it will be 2020 to make Bangladesh free from power crisis.

International Atomic Energy(IAEA) has agreed to support the proposed Rooppur Nuclear Power Generation Plant. But God knows, when we shall able to generate power from nucear plant!

Efforts are also underway to generate electricity from coal and renewable solar energy. But solar enegy are so far fulfilling the small domestic requirments of rural areas only.

Professor Abu Ahmed, the economist from Dhaka University blames on ourselves for failures in the power sector[PA 31 July 2008]

An ordinary citizen

Bangladesh Budget 2008-09 and SME July 9, 2008

Posted by bdoza in BANGLADESH, Budget, ECONOMY, GOVERNANCE.

Budget 2008-09 identifies the SME (Small and Medium enterprise) as the thrust sector,the development of which is important for the growth of economy in Bangladesh.

The budget suggests to continue no-income tax policy to keep the income of the manufacturing SME articles free from taxes by defining SME as overall turnover not exceeding Tk. 2,400,000.00 (more…)

Bangladesh budget 2008-09 and ICT sector June 27, 2008

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Budget acknowledges Information and Telecommunication Technology (ICT) is our thrust sector.[DS]
Taking into account this priority, Government is formulating national e- governance strategy supported by a national ICT road map. But this strategy is not yet declared.

Budget informs that the first phase of infrastructural work of a 231 acre hi-tech park at kaliakoir near Dhaka will be completed by the end of this year. Efforts are underway to attract the private and foreign investors to make investment inn this IT park. India, even West Bengal has more than on IT parks. They are establishing IT parks in small towns also. Bangladesh should advance to that direction. (more…)

Bangladesh budget 2008-09, Food Security & Agriculture June 25, 2008

Posted by bdoza in AGRICULTURE, BANGLADESH, Budget, ECONOMY, Food Security, GOVERNANCE.
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Budget states climate change calamities like drought, wildfire and floods have reduced the food production in many countries. Alternative use of crops to produce bio-fuels in the developed countries also reduced the food supply in the global food market. Besides the phenomenon growth in some densely populated countries has increased the aggregate demand of food. At the same time, due to overly cautious protectionist policy of the food-grain exporting countries, the price of food rises sharply. Due to hard work of our farmers along with the support of the government in the form of providing fertilizer and fuel, we had a bumper production of potato and wheat this year. This has largely reduced the vulnerability to food insecurity. In addition to overseas procurement by Food Directorate and BDR, efforts are continuing to import rice and wheat by incentivising the public sector. (more…)

Bangladesh budget 2008-09 and Social Safety-Net June 23, 2008

Posted by bdoza in BANGLADESH, Budget, ECONOMY, GOVERNANCE.
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To overcome the impact of global food shortage and the price hike of the essentials on the poor and the lower middle class, the budget proposes to widen and deepen the social safety net programs by increasing the total number of beneficiaries and increasing the allotment to 16,932 crore in the present fiscal year which is 48% higher than the revised allocation of Tk 11467 crore.

To this purpose, government has allocated 100 days employment generation program to ensure employment of the rural unemployed poor across the country for 100 days during the whole year and in particular during mid-October to mid-January and mid-March to mid-May periods. 20 lac people will get the job opportunity under this program. The program is designed as an employment guarantee program for the unemployed poor. For this , Tk 2000 crore has been allocated in the budget. This will create 20 crore mandays with daily remuneration of Tk 100 per person. The budget claims,of all the safety net program launched so far, this is the largest. (more…)

Views on budget 2008-2009 June 11, 2008

Posted by bdoza in BANGLADESH, Budget, ECONOMY, GOVERNANCE.
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After declaration of Bangladesh budget for 2008-2009, views from different experts, individuals and organizations started to pour. Following are some of them-

The Finance Adviser himself on a post-budget press conference said that the budget aims at 8 major objectives[DS]and claims the budget is investment friendly, implementable and poverty alleviating.[PA]

The Think Tank CPD (Center for Policy Dialogue) said that the budget investment friendly and is more public satisfying.[DS][PA]It also said that Govt’s increased borrowing won’t affect the private sector credit needs.[DS]
Different chambers hail the budget[DS]. The MCCI ( Metropolitan Chamber of Commerce and Industries) said the budget reflects the challenges but the export leaders expressed that the budget is not export-supporting[PA] (more…)

Bangladesh budget for fiscal year 2008-09 unveiled June 9, 2008

Posted by bdoza in BANGLADESH, Budget, ECONOMY, GOVERNANCE.
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Dr. Azizul Islam Chowdhury , Finance Adviser of the Care Taker Government unveiled the annual budget of Tk 99,962 crore for fiscal year 2008-09 today.
Ministry of FinanceFull Text [in English]/ [in Bengali]
Daily Star:[…][…][…]
Prothom Alo(in Bengali):Full text/News
bdnews24.com […][…]

The ordinary citizen prefers to go through the budget by himself before making any comment.

An ordinary citizen

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. (more…)

VAT+Income Tax=double taxation on the professionals August 31, 2007

Posted by bdoza in BANGLADESH, Budget, ECONOMY, Income Tax.
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When the Budget for 2007-2008 was declared and it introduced the VAT for the professionals including doctors and lawyers to give VAT on their income, the ordinary citizen thought that from now on the professional will give only VAT on their professional income at the rate of 4.5%.


The ordinary citizen thought that it will lessen the harassment of the professionals by the Income Tax staffs and officials.

In reality, the ordinary citizen found that the professionals will have to give double tax. On the one hand, they will have to give VAT on his professional income on monthly basis, then again Income Tax on his total income including the professional income on yearly basis.


‘Budget for Agriculture and Budget for farmers’ July 2, 2007

Posted by bdoza in AGRICULTURE, BANGLADESH, Budget.
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Mr. Shayeikh Siraj of Channel ‘I’ has presented some proposals on ‘Budget for Agriculture and Budget for farmers’ first to the Advisers of the CG and then to the Chief Adviser.

The proposals include the more allocation of budget to the Agricultural sector, allocation of more subsidy for the farmers, proper distribution of diesel and fertilizers to the farmers , proper distribution of improved seeds to the farmers, introduction of ID card for the farmers, to organize farmers Association for bargaining, to clarify the Govt stand on hybrid plants and fruits, for increasing vertical production in the Agricultural field etc.

The advisers appreciated the efforts made by Mr. Siraj to organize the farmers, to develop a communiqué with them and to prepare the proposals. The Finance Adviser told that he will try to accommodate the money related proposals in his next budget and the management related proposals will be implemented this financial year.

In his reaction to the proposals, Chief Adviser Dr. Fakhruddin Ali Ahmed told that he was thinking on the ways how to improve the state of the farmers in Banglades, the proposals will help him a lot in that respect.

Bangladesh is an Agricultural Country and most of the people of our country are farmer by profession. Still our Agriculture remains primitive in nature and our farmers remain the poorest of the society. Our farming not improved with age. The successive Govt didin’t pay much heed to it.

Time has come to change our outlook and pay more attention to our Agriculture.

Thanks to Shayeik Siraj for the trouble he is taking to make us and our Government aware about the need of the Agricultural sector in our country.

People will remember him.

Budget, critics and criticisms June 27, 2007

Posted by bdoza in BANGLADESH, Budget, ECONOMY.
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The draft budget has been handed over to the President by the Finance Adviser Mr. Azizul Islam.

He placed the Budget to the nation first over TV and Radio and it was published in the internet immediately after the placement in the TV.

For comments and suggestions from the public and the experts time was given for a week which was extended for few more days.

This year Budget specially created healthy debate among the experts as well as in the public.


Probably this is the first time we have seen so much enthusiasm among the public. All section of people ranging from businessmen, economists, technologist, professionals all participated in the discussion. Special discussions were also arranged among the farmers by Mr. Shayekh Siraj of Channel ‘I’ where the Agriculturel Adviser along with other experts were present.

TV channels arranged discussions and Printing Media published many articles on the issue.

The ordinary citizen also took interest in the budget and followed some of the discussions and read few articles.

Though the budget was in general acclaimed by many but specially the economists didn’t remark much positively.

One common remark is that this budget is not an exceptional but mere a conventional budget. As if by a single budget one would create a revolution! We rather accepted the negative remark as its positive strength. We are pleased that it is a conventional and pragmatic budget. At this stage of our country, pragmatism is more necessary than so called revolutionary thinking.

The other criticism is that in budget there is no measure to control the price. This criticisms also came from the Economist and their Society. We are not sure whether it is the official comment of the society or it is the comment of one or two of the office bearer. The latter may be true. But we know that in the budget there are multiple measures including withdrawal of taxes from the essential commodities.

The business community appreciated the budget but at times many of them expressed their concern for lack of protection of the local industries. The Finance advisor tried to give answer to their concern.

The Computer Technology -IT business sector also voiced their concern over the tax imposed on the computer and ita accessories. Finance Advise opined that he will consider the issue though he also said that the taxes will have no adverse effect on the computer market.

The professionals especially doctors felt concern regarding the VAT imposed on them. I have gone through an article written by Dr. Shafiqul Islam in Prothom Alo in this regard. Budget proposed the measure to decrease the harassment by the tax office. Introduction of VAT may increase the collection of taxes from the professionals but hope that it will decrease the humiliation of the professionals regarding tax payment.

On the one hand Govt is to increase the Revenue earnings , on the other hand it also required to address the concern of the people and the community.

In addition to increase of the taxes, Govt should also consider ways to decrease the Revenue Expenditure and dependence on the foreign loans for our ADP. They should also consider the gradual introduction of e-governance in state machinery to improve the efficacy of Governance.


Income Tax: to be the symbol of social status June 21, 2007

Posted by bdoza in BANGLADESH, Budget, ECONOMY, GOVERNANCE, Income Tax.
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In the Budget Speech, the Finance Adviser declared that CG will make the Income Tax the symbol of social status.

Nice objective. But before that let us see what the state of Income Tax is.

Now, the Income Tax means something imposed from above. The tax payer feel that Government is imposing income tax without extending due services to the tax payers

Income Tax creates worry to many at the end of the financial year because of the harassment awaiting for them in the tax offices.

Income tax creates a sort of agony in many who feels disturbed to pay extra expenses to the tax offices. It is not that people are not willing to pay but the system is such that they are not feeling easy to pay. It is known that people in the Tax offices are more willing to extract money for them than for the state.

It is felt that the rich are paying proportionally less income tax to the state than common people as he can easily satisfy the office. Compare the stress felt by a richer man to pay Tk. 10000 to the office than paying Tk. 5000 by a middle income man. But consider the loss that is incurred by the state. So richer people can able to dodge larger amount of money by paying extra cashes to the office.

Among the taxpayers, it is not taken as credit –who is paying how much. It is rather opposite- who has dodged how much is taken as credit. Our Governments over the years failed to create a society where higher tax payers are acknowledged and acclaimed.

What benefit Government is giving to the tax payers. Except the label of CIP, I personally know nothing.

The ordinary citizen has some suggestions:

1) Government can consider extending the financial benefits on the basis of Income taxes given by the individuals-such as fixing the amount of loan by the banks and financial institutions on the amount of taxes, etc.

2) let the tax of the individuals be disclosed or publicly known. So that culture develop to compare the taxes, not the income or the wealth,

3) Clean the Income Tax office from corruption so that people of the departmen do not consider it as a department to make illegal money ; Few days back I met an Engineer who passed from BUET and now working as a Deputy Commissioner of Taxes; but why on Earth a BUET Engineer would choose the Income Tax as his career department!

4) Simplify the systems of payment of income tax so that a tax payer does not the need the help of a middle man ( income tax layer or office man ) to prepare his return

5) Gradually electronic payment system may be introduced where the tax payer will pay his taxes through internet which is now followed in developed countries

6) Slim down the Income Tax Department , make it more automated. The unnnecessary staffs has created a negative image of the dematment than doing any good

7) In assessment of the professional income, the help of the professional bodies can be taken. It will be more accurate and rational than the so called of the so called Inspectors, who thrive on their twisted assessment; etc.