Hiren Pandit: The budget announcement is coming like in previous years. The budget for the financial year 2023-24 will be presented in the National Parliament in June. The size of the development budget or annual development program (ADP) for the next financial year 2023-24 has been estimated at Tk 2 lakh 63 thousand crores. Of this, 94 thousand crores will be given by various development partners and the remaining 1 lakh 79 thousand crore taka will be spent from the revenue sector of the government. The size of ADP for the next fiscal year is 17 thousand crores more than the current fiscal year 2022-23. In this financial year, the size of ADP was 2 lakhs 46 thousand 66 crores.
Sources in the Planning Commission say that the annual development program (ADP) allocation is not likely to increase due to increased expenditure on interest and subsidies. Compared to the current budget, the allocation for this sector has been increased by only 6.80 percent and 2 lakh 63 thousand crore taka are being kept in the next budget. Whereas in the previous fiscal year 2021-22, the size of ADP was Tk 2 lakh 25 thousand crores. That is, the size of ADP increased by 21 thousand crores in the financial year 2022-23 and this time it is increasing by 17 thousand crores.
If the allocation for development work is not increased, there will be no development. So, the allocation has been increased. If the allocation is low, the work will not progress due to lack of funding. Other developing countries do the same. The government claims that the allocation has been increased to speed up the implementation of development projects. A large number of administrative expenses in running the country occupy a large portion of the budget. Economies around the world are reeling from the Covid pandemic and recession. Many people, especially low-income people, are struggling to live due to the narrowing of earning opportunities. Those who had the opportunity to cross the poverty line are falling back into the old situation due to the narrowing of earning opportunities. Due to a decrease in people’s income, the government is under pressure to collect revenue. If the revenue collection is low, it is necessary to reduce the other expenditure and increase the expenditure in the productive sector. Because lack of employment creates unemployment. Unemployment can be eliminated by creating employment. The government has to play a role in creating employment and increasing productivity and therefore the government should increase its investment in the productive sector. The private sector can be encouraged.
Globally, there are still leftovers of the Covid pandemic, in which the Russia-Ukraine war has further devastated the world economic system. Many countries, including the United States, the European Union, and Japan, are in a state of chaos with economic sanctions against Russia. Bangladesh is also not free from its influence due to the chaotic conditions of the environment. The economy of Bangladesh is also under pressure to some extent. Sectors like small and medium industries, agriculture, fisheries and light engineering industries should be given more importance in the budget. It should also be ensured that the farmer gets a fair price for their production. A class of middlemen, traders, benefit from the marketing process. During the production season, the price of paddy is low, then it doubles. Then there is no more rice in the farmer’s house.
On the one hand, the domestic industry should be protected and the production system of nutritious food, eggs, milk, fish and meat should be maintained. Otherwise, the country may fall into a food and nutrition crisis. Char was raised-up in the river Jamuna and is now contributing economically to farming families. When the water recedes after the monsoon, the fertility of the land increases due to sedimentation. As a result, a wide variety of vegetables including almonds, corn, wheat, pepper, onion, garlic, and rice are cultivated. Farmers are unable to sell vegetables at a fair price due to a lack of good communication and not being able to easily take the vegetables elsewhere.
We need to keep the fundamentals of our macroeconomics strong and reduce the trade deficit. The country has not made significant progress in reducing income inequality. There is a disparity between rural and urban lifestyles. It must be removed. For this, it is necessary to diversify the rural economy, increase employment, strengthen the social safety net, undertake capital formation and income generation activities, and achieve food security. Effective steps should be taken to increase the purchasing power of the common people and control the prices of daily commodities. By keeping the import chain in place and keeping the supply chain activities, the budget should focus on new employment and productivity by keeping the daily necessities in front.
The work of the National Budget is very extensive. The purpose of the budget is not only to control the income and expenditure of the government but also to build an economic system acceptable to the people of the country. The 2023-24 budget will be the 52nd budget of Bangladesh. The country’s inflation rate was 6.1 percent in the previous months. The IMF has forecast inflation to be around 6.4 percent for the full year. The social security sector of the budget is an important issue. There is a lack of transparency in the sector in terms of getting the benefits properly to the beneficiaries. The number and scope of beneficiaries in the social security sector may increase. Currently, there are 123 programs in the social security sector. 30 ministries and departments of the government are implementing this program. 5.7 lakh beneficiaries are getting old age allowance in the current financial year. This year, 11 lakhs can be added to 68 lakhs. 100 Upazilas are newly included in the scope of old age allowance and widow allowance; Which is a good initiative. As a result, the number of beneficiaries in Upazilas is 362.
At present our economic growth is satisfactory but its benefits have not reached the common people equally. The real income of many people in the society has not increased. Apart from that, inflation has reduced people’s real income. Marginalized people are suffering due to rising commodity prices. Income inequality is a major challenge in society. Therefore, the tax system should be reformed to eliminate the disparity in the budget. Tax evasion by the rich must be stopped. The scope of direct taxes should be increased. Growth is indeed an important issue for the country but this growth needs to be spread through equitable development. So, the new budget should give importance to this issue.
Whether the growth we talk about today is employment friendly is a big question. Millions of youths are currently jobless, unemployed and unable to engage in business for lack of necessary capital. There should be a clear announcement in the next budget in terms of employment creation, and increasing employment opportunities. Our employment abroad is also not growing at the desired rate at present. After the way of Covid, in the Middle East, Malaysia has created an opportunity to hire workers, but we are far behind in this field. Emphasis should be placed on private investment for employment generation. The expansion of small and medium industries has not happened much. In many cases, we are still dependent on imports. In order to make the base of the economy strong and sustainable, a plan should be taken to gradually reduce imports along with increasing domestic agriculture, increasing industrial production, and increasing exports.
The government should focus on a few things for the budget and they are – the conditions of the International Monetary Fund (IMF) have to be fulfilled. Revenue should increase. Inflation should be kept under control. The budget deficit should be contained and investment in the private sector should be increased. The government increased the duty tax and LC margin to discourage the import of various types of luxury goods including cars, fruits, and cosmetics, before the budget and in the budget to hold the reserve to deal with the dollar crisis. The dollar crisis that has complicated budgeting for the past year is no exception. Moreover, there are conditions for reducing subsidies in various sectors including electricity and energy. Even if the government wants to, it does not seem that it will be able to reduce the subsidy much in the new budget. Because the stressed economy needs to move. In that case, the subsidy cannot be reduced in some sectors.
Expatriate earnings and export earnings are still in good shape. The expatriate income received in the first ten months of the current financial year is slightly higher than the same period of the previous year. The growth in the export income of the current financial year has been 9 and a half percent. How many people are unemployed in the country now, cannot be said for sure. A few years ago, about 2.7 million people were unemployed in the country. There is no calculation of how many people became unemployed in the past years or how many people got jobs and lost unemployment. Of course, many people have become unemployed due to Covid. The job market is also miserable due to a slowdown in business. That statistic does not exist. Through labor force surveys we get information about unemployment, working people, size of the labor force. Recently BBS conducted a labor force survey. The actual account of unemployed people is not available due to various reasons. But every year at least 2 million people enter the job market. It is not known how much their employment has been. Economists also have questions about the statistics given by the government. According to them, the actual number of unemployed may be much higher than what the government gives.
According to the latest Labor Force Survey 2017-16, the number of unemployed people in Bangladesh is around 2.7 million. The unemployment rate is 4.2 percent. BBS gives another account, that is working less than 35 hours a week, but they are not satisfied with that work. Simply put, many work as tutors, salespeople, and ride-share workers like Uber-driver to earn a living without looking for a job. They are considered part-timers. The government has to play a role in creating employment and increasing productivity and therefore the government should increase its investment in these sectors.
Hiren Pandit is a columnist and a researcher. He can be contacted at hiren.bnnrc@gmail.com