The
proposed budget for the fiscal 2003-04
failed to design any illustrative
plan for poverty reduction, said
Executive Director of the Centre
for Policy Dialogue Debapriya Bhattacharya
yesterday. Although the new budget
closely followed the mid-term macroeconomic
framework agreed under the Interim-Poverty
Reduction Strategy Paper (I-PRSP),
a poverty reduction recipe of the
World Bank, it did not give any
clear indication of reducing poverty,
Debapriya and his team told a press
briefing on initial assessment of
the budget.
Presented by Finance Minister M
Saifur Rahman, the budget is mainly
based on a high foreign aid flow
and an ambitious target of revenue
collection, said Debapriya. He fears
if the government fails to fulfil
the conditions set by multilateral
agencies, they may stop providing
further assistance. "Increased
foreign aid may also hamper the
government's revenue earning process,"
he said.
About the proposed annual development
programme (ADP) of Tk 20,300 crore,
he said the budget dose not provide
any significant formula for implementation
of the ever-large ADP.Only 50.7
per cent of the ADP for FY2002-03,
with its revised figure of Tk 17,100
crore, has been implemented until
March, Debapriya quoted from an
IMED (Implementation Monitoring
and Evaluation Division) report.
Saifur did not present any specific
measure to ensure the accountability
of ministers in implementation,
nor did he mention the law and order
slide in his budget speech, which
has a negative impact on business,
Debapriya said.
Inefficiency in the utility sector,
port problems, delay in separation
of the judiciary, lax decentralisation
of the local government, non-formation
of an independent anti-corruption
commission and slow privatisation
are among the topics the finance
minister ignored, he said. "These
are extremely needed for investment
to rally. "The minister did
not reveal the reform plan agreed
by the government with development
partners during the recent Bangladesh
Development Forum meeting, he said.
Saifur attempted to change the format
of restructuring the economy but
never mentioned the way, he said. However,
Debapriya applauded the budget for
providing discreet support for agro-based
industries, textiles and readymade
garment sector.
Saifur proposed an allocation of
Tk 50 crore for agro-based industries,
as the government utilised only
Tk 31.5 crore of Tk 100 crore allocated
in the outgoing fiscal. Reduction
in corporate tax from 30 per cent
to 10 per cent up to June 2006 will
provide the sector with a breathing
space, said Debapriya. Lessening
and re-fixing the corporate tax
at 20 per cent for textiles for
the same period will help the sector
sustain in the post multifibre agreement
(MFA) reality, he said.
He suggested that withdrawal of
value-added tax (VAT) exemption
on credit cards should not be applied
on customers. The withdrawal of VAT
on travel agencies will not boost
tourism, as the sector's development
does not depend much on it but largely
on infrastructure and law and order,
he said in his assessment report.
Increase in customs and supplementary
duty on sugar will up the price
of sugar on the domestic market
and encourage smuggling, he said.
Upswing in supplementary duty on
powdered milk and salt will tax
commoners.
Debapriya criticised the budget
for extension of concession on import
of reconditioned taxicabs and said
it will deteriorate urban pollution.
Reduction in supplementary duty
on spirit, wine and other alcoholic
drinks has also been criticised. However,
he appreciated the increase in customs
duty on rice to 22.5 per cent from
7.5 per cent.
Debapriya identified three major
factors as instrumental in implementation
of the budget: flow of private investment,
resurgence in exports and implementation
of ADP. CPD research fellows Ananya
Raihan, Uttam Deb, Fahmida Akhter
Khatun and Head of Dialogue and
Communication Anisatul Fatema Yousuf
attended the briefing.
