The upcoming budget should be strategic and far-reaching: Dr. Atiur
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Photo: Collected
If Bangladesh's potential remittance and export sector is strengthened, Bangladesh's development journey will go ahead without the support of the World Bank or IMF, said Dr. Atiur Rahman, former Governor of Bangladesh Bank and Emeritus Professor of Dhaka University.
He made this comment while talking to Barta24.com about the pre-budget expectations on Tuesday, on the eve of the presentation of the national budget in Jatiyo Sangsad(JS) on June 6.
Referring to this year's budget as 'special' for various reasons, the former central bank Governor said, "Geo-political instability and global polarization will definitely affect our national budget this year." Commercial ships plying through the Red Sea have been subjected to attacks by the Houthi rebels, forcing them to make frequent sea voyages. The cost of transportation is increasing. Therefore, the price of goods is also increasing. Due to the increase in import costs, the challenge that has been created with the balance of payments in recent times has never happened before.
He said, 'structural challenges in the economy have increased a lot, which will be reflected in the national budget. In this place, we who are people of the economy should describe the issues in the language of the economy, without creating panic. Due to the reality, the main goal of the upcoming budget should be to achieve stability of the overall economy, not growth, said Dr. Rahman. Moreover, the budget should be realistic not ambitious, he added.
The discussion that I want to bring is, why can't we use the funds in the previous budgets for social security in the revised or next budget? This discussion should be prioritized before the revised budget'- added Dr. Rahman
Talking about the likely nature of the budget, he noted that 'as far as we know, the size of this contractionary national budget may increase by about 4 percent. Surely we have to practice spending by looking at our income. Otherwise, the budget deficit will increase. The reality is that prices can be completely fixed by reducing demand - this is not right. We can see that there is supply in the market, but the price is not being reduced. That means there is a flaw in the market management.
Urging for alternative incentives, Atiur Rahman said, "Despite the pressures of the IMF or the World Bank on incentives, we are continuing to give subsidies to priority sectors including agriculture and will continue to do so until 2026." But we also have to remember that if this incentive has to be rushed, then as a preparation we have to have an alternative incentive strategy to advance other important sectors including agriculture.
"On the whole, export and remittance incentives cannot be withdrawn now. Before lifting incentives in these sectors, it should be seen whether the macro- economy has reached a stable state. Also, I am not in favor of doing business in the developing ICT sector. Small entrepreneurs should be given more tax benefits.
Emphasizing on innovative steps in the remittance sector, he said, 'But I think it is very important that - how much are we doing for the huge potential remittance sector? About 2 billion dollars are coming from this sector every month. But we are struggling to get only 4.7 billion dollars from the IMF. But if we could have given more facilities to the remitters, this sector could have become a big place of dependence. Housing loans are given to remitters who send money legally in India.
Emeritus Professor DR. Atiur Rahman said, "We will demand special treatment in hospitals during their stay in Bangladesh, including inclusion in the pension scheme on a priority basis." They should be rated as 'national heroes'. It is very important to adopt more innovative strategies and programs in this sector. Then these remitters will open the door of great possibilities for us. We will be encouraged to send more and more remittances through legal channels. It can be said with emphasis, if our remittance and export sector is strong, we will not need so much cooperation from World Bank-IMF.
Demanding to increase the allocation to the health sector by increasing the price and tax on cigarettes, he said, "In terms of taxation, it is very important to increase the price and tax of harmful products like cigarettes. We have shown through comparative research that it is possible to get at least Tk. 10 thousand crore more through higher taxes and price hike on cigarettes. With which more allocation can be increased in the health sector.
Demanding to make the upcoming budget climate-friendly, this economist said, "Our next budget must be climate-friendly." It may be mentioned, that the Cyclone Remal swept away; We can wonder what would have happened to us if there were no Sundarbans. What we are doing, what are we allocating in the budget for this natural infrastructure i.e. the Sundarbans that we have saved by getting the chest. We have a lot to do to protect this natural infrastructure. There will be no shortage of money for this. There is no doubt that huge money will come from abroad to deal with climate change impacts, but we need to increase the institutional structural capacity to receive that money.'
DR. Atiur Rahman also talked about more participatory and direct involvement of the legislators in the formulation of this budget. In this context, he said, 'Parliamentary standing committees can have many roles around the national budget. We have also discussed this with the concerned parties. We have also been working to increase the conceptual capacity of the people's representatives on what kind of budget they want considering the needs of their region and the national budget, on behalf of the research organization Development Coordination. We would like to say that the budget speech is a statistical presentation of information based on estimates.'
"I think it should be a philosophical speech. Where there will be a matter of awakening dreams among the people. Of course, taxes should be made keeping in mind the public demand in the budget. Also, paying taxes is part of patriotism - this campaign should also be across the country.
Dr. Atiur Rahman presented the example of the budget presentation of the first government of independent Bangladesh by demanding to present a simple, concise and smart budget for the common people.
He said, 'Tajuddin Ahmed, the first Finance Minister of Bangabandhu's government, gave the budget of the first government of Bangladesh in 1972 after independence. With the help of then Finance Secretary Motiul Islam, Tajuddin Ahmed presented a short smart budget of 15-20 pages. I think the recent national budgets are too long. Many Finance Ministers even fell ill while presenting it. I think there is an opportunity to make this budget shorter and smarter.
The coming budget is the first budget of this newly elected government. Professor Atiur Rahman mentioned that this budget is going to be the foundation of the development strategy for the next five years. Therefore, from a strategic point of view, this budget must be very strategic and far-reaching.
