The proposed budget is an ambitious one. We expect clear guidelines and plans from the government how this budget is going to be implemented, given the fact that weak implementation of budget has become a norm in recent years. It is important to highlight how the performance of different ministries will be improved to implement this proposed budget.
This budget has taken a number of positive initiatives. For example, pension scheme for all, government employees under insurance coverage, wealth tax, additional tax on the registration fee for vehicles, incentives for remittances, and tax office in every upazila. However, like in the past, there is no assessment why different positive initiatives proposed in the past budgets didn't materialise. Therefore, it is important that there is a mechanism in place to evaluate the implementation of the positive initiatives proposed in the budgets. Otherwise, many of these initiatives will remain only as words.
There are few initiatives which can be counterproductive. Investment amnesty proposed for black money, without any punitive measures and political matronage and poor monitoring can make this initiative unsuccessful.
It is imperative that the overall business environment of the country is improved significantly which lead to the much needed acceleration of private sector investment. Given the current practice of slow progress in implementation and costly ventures, speedy and cost-effective implementation of the mega-projects, special economic zones and other development projects under the annual development programme (ADP) is very important. We haven't seen in the proposed budget how things are going to be different in the coming days.
For export diversification, which is very critical for Bangladesh, the non-RMG export oriented sectors should receive much higher priority and attention than the RMG sector, which is not there in the proposed budget. Also, with the poor structure of the tax system and laws, it is not possible to increase the tax-GDP ratio significantly within the next couple of years, as mentioned by the finance minister.
Two other areas didn’t get desired attention: the much-discussed fragile banking sector and the agriculture sector, especially how the crisis in the agriculture can be solved through effective government interventions.
The writer is executive director of the South Asian Network on Economic Modeling