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BUDGET '95- 96 : TWO VIEWS

The Budget and the Political and Economic Matrices

by Muhammad Quamrul Islam
NOW that the 20th ses ■won of the fifth Parliament is in force and the Finance Minister has presented the budget on 15th lune 95, it is quite natural to expect reactions suggestions and criticism within and outside the Parliament But seemingly, electoral politics is so predominant that the necessity ot planned deve lopment by budgetary means, to steer the economy, through the difficulties, to prosperity which everyone could share, has almost Deen missed from the minds of the government functionaries It lust did not happen in one day ft is t»e outcome of perilous situation converging the parliament, since 1st March, 1994, and all requests to come out of the impasse went in vain. Instead, the situation has only worsened resulting, in unanticipated departuse from the course of planned development which the country has strived for since independence But for how long? We don t know! However, one thing we know for sure that the fiscal 1995 96 is also the election year, — in whatever way the relevant provisions of the constitution arc interpreted
This is for the first time in our economic history that a Budget 11995-96) has been placed by the Finance Minister without any mention of reference to short or long term planning Neither the fifth five year plan nor the perspective plan has been announced to take effect from 1st July, 1995 What the State Minister for Planning is now talking about the perspective planning exercise, in not the same what he told about fifth five year plan last year. Anyway, the fact is, no plan (of any Type) was available with the Budget 1995-96 and the revised Budget 1994-95.
Economic survey, which is published annually along with the Budget, was also not available. It has appeared in the press that as per the avowed participatory and bottom-up approach for a fu ture perspective plan for Bangladesh, by the State Minister for planning, reports on 10 districts have been pre pared (ill him 15, 1995 So its yet a long way to go, and complete 64 districts, then to pass through various steps to finalize the draft plan document Meanwhile, it is learnt with dismay, that despite there being widely experienced, foreign qualified, efficient officials at the Planning Commission, State Minister for planning has appointed three local consultants, for one year duration each, to evaluate district reports. Monthly salary of each local consultant is said to be 8000 US dollars which is equivalent to Taka three lakh on 20 thousand. Further, five luxury jeeps have been purchased at a cost of Tk one crore 50 lakh on the plea of maintaining contacts with the districts. But. its reported that two out of the five jeeps remain at the residence of the state minister while another one met with an accident. May be not all is mere allegation.
Financial figures, as expressed in crore taka, against different heads of account, indicate the quantity and percentage increase in the budget, year to year! At a glance, the total expenditure estimated for financial year 1995-96 is Tk 24,707 crore. In the revised budget for 1994-95, the total amount stands at Tk 23,079 crore. What the voters, will make out viewihg the television or listening to the radio, of the Budget speech of the Finance Minister? Reactions will obviously be different, no mat ter that 65% of the adult population who are voters are illiterate. It is not ethical to magnify the figure, compare these with those of the past regimes, unless something concrete is visualized, positively not superficially, to improve the lot of the poverty stricken people. In 1994-95, a sum of Tk 1,346, crore is supposed to be spent more than what was pro vided in the original Budget, i.e. Tk. 21733 crore. Now, the revised expenditure upto 30.6.95 stands at Tk 23,679 crore. What the people at large have reaped Jrom these revenue and development ex penditures, original and revised, during 1994-95?
It does not require a fresh survey or research to say that the people has suffered, the government servants irre spective of cadre and class, have received a percentage increase in their salary etc The massive fertilizer crisis paper crisis, food crisis and price spiral of essentials have broken the backbone of crores of people. There is no mention of these crises in the Budget speech of the Finance Minister Increasing the bud St provision for food stock am Tk 70 crore in the original Budget for 1994 95 to
Tk 414 crore for 1995-96 does not speak Well about the performance in the Agricultural, Water Resources and rural development sectors And what would be the ex tent of food deficit in the next financial vear' Comparing the different estimates, it seems reasonable to predict the quantity at 30 lakh metric tonnes or so But then, we were told before that Bangladesh had attained self sufficiency in food What has happened to that? It is fair to put al) blame on nature, instead of Ministries, Agencies and consultants responsible to stabilize and raise the level of food production?
The present Government was formed on March 20, 1991. The tenure of the fifth Parliament will expire on April 4, 1996, unless sooner dissolved by the President So it is clear that the imple mentation of Fourth Five-year . Plan 1990-95 in whatever way it deemed fit. Was the responsibility of the present Government and consequently the preparation of Fifth Five Year Plan (1995-2000) plan as well as perspec tive plan in due time But it appears that BNP Govern ment has avoided that, presumably for the next election and to keep aloof the much trumpeted macro-economic stability claimed by the Finance Minister!
Everybody in the know of the thing is aware that macro-economic gams, if any, could not be translated into micro-economic growth; the investment is sluggish and Sowth rate is very slow. We mt know if any success has been achieved in the alleviation of poverty and employment generation botn in quantitative and qualitative terms. The Finance Minister has not mentioned about the level of gross domestic product and per capita income in 1995. There are lot of controversies, according to the Bangladesh Bureau of statistics per capita income during 1990-91 was 123.52 US do) lar and it shrank 117.80 US dollar during 1993-94. We expected a figure for 1996 and 1995 on per capita income from the Finance Minister or the State Minister for Planning in a concrete way.
As regards imposition of no new tax in the budget proposal for 1995-96 and wide scale reduction of taxes on various, terms these will, no doubt, be applauds, if the benefits, by lowering prices, are passed on to the consumers, share holders and local producers. But, so far, the market did not demonstrate any reduction of prices. There is apprehension, and
quite naturally that the benefits of low or no custom duty etc will go into the pockets of busmess community, in dentors etc How far the extent of reduction of corporate tax, extension of tax holiday etc. will benefit the shareholders, accelerate the investment and contribute to growth are yet to be measured The Budget 1995-96 has not shown any mechanism as to how the tax proposals will finally benefit the consumers and the producers Meanwhile the operators of transport vehicles (who are well organised) have expressed doubt that the importer of transport spares and equipment will not lower the prices, because of tax reduction, rather they would fatten their profits. In that case, what will happen to the passengers they will continue to pay nigh fares.
The budget is silent on the continued loss of Tk 2500 crore per annum on state enterprises
It is known to all that if this huge loss could be eliminated, the economy would grow by additional 2 percent and in that way the government could enhance the growth rate to 8 per cent adding 2 per cent to then announced 6 per cent (?) growth rate' The government also did not announce any measure to stop stealing, in the name of system loss, to the tune of Tk 400 crore in electricity and Tk HX) crore in gas per an num. So, how the economy will grow can hardly be imagined It is not understood how many votes BNP would have lost (in the context of six crore voters) if they took actions to eliminate the above losses
Regret ably, the budget has shifted lot of burdens, unresolved issues, etc On to the next government; whichever party comes to power With SRO be used to increase tariff, as done previously, to compensate the loss of revenue to the tune of Tk 350 crore in '96? It is to be noted that 92.5 per cent of the revenue under NBR will come from indirect taxes i e Customs. VAT etc, the burden of which arc borne by the general people, irrespective of theit income levels.
There is no fifth five-year plan or perspective plan ap patently with the govern ment; how the next government will react is difficult to estimate But, one thing is certain that Bangladesh is lag ging behind more due to government indecision, bureaucratic bottlenecks and corruption.
The v or. i i'an E<“ih’ini-i and Advocate BumdaJcMi Supreme Court.