Economists term budget ambitious

Economists have described the proposed national budget as ‘ambitious’, saying it lacks policy measures to address the macroeconomic challenges amid the coronavirus pandemic and global political situation.

They, however, appreciated the government for giving subsidiaries in agriculture, food security and energy to tackle the increasing pressure on the economy.

Former Bangladesh Bank Governor Salehuddin Ahmed said the budget focused only on allocations rather than fiscal measures for economic stability.

“Firstly, we should think about pro-people topics in the fiscal planning. There’re several challenges in money market, inflation, balance of trade and other indicators of the economy. The authorities should think about increasing facilities in savings certificates, pension fund and social safety net considering the welfare of common people,” he said in an instant reaction to the budget.

The eminent economist urged the government to make a link between fiscal planning and monetary policy for sustainable growth of the economy.

Former BB Governor Dr Atiur Rahman termed the budget a pragmatic one that targets to overcome challenges arising out of accentuating supply chain disruptions due to Ukraine war at back of pandemic recovery.

He thinks the focused attention on increased allocations for agriculture and consequent food security in a volatile world has indeed been a highly prudent move.

“Indeed, our robust agriculture has not only been the ultimate safeguard of our economy in the difficult days of the covid-19 pandemic but also continues to remain a source of employment plus robust domestic consumption and demand,” the eminent economist said.

He said the government has been substituting import of food and thus helping the stability of foreign exchange reserve with enhanced agricultural production.

The budget also provides extra incentives to the digital entrepreneurs by reducing tax to the start-ups which will go a long way in taking the country to fetch five billion dollars worth of exports from digital products and services, Dr Atiur said.

He appreciated the decision to do a feasibility study on digital central bank currency, terming it a welcome move.

“We have gone a long way in promoting mobile banking and internet banking to go for cashless society. This will further boost that journey. However, the increased five percent tax on broadband services and on the retail sales of mobile sets will increase the cost of digital services leading to further digital divide,” added Dr Atiur.

Centre for Policy Dialogue (CPD) Executive Director Fahmida Khatun said the country placed the budget at a challenging time when the global economy has faced a setback amid the Russia-Ukraine war on its way to recovery from the pandemic.

“The Bangladesh economy is not an exception. There’s a huge inflationary pressure. Fiscal measures are not sufficient for taming the inflation. We’re surprised at the tax structure on commodities as no item except wheat gets privilege,” she said in an immediate reaction.

The economist said the reduction of allocation for the social safety net is not acceptable at this challenging time.

Policy Exchange Chairman Dr Masrur Reaz appreciated the government for injecting subsidies in a couple of sectors, including agriculture and energy, for taming increasing trend of inflation.

“Our economy is on a rising trend. At this point, the budget size grows 15 percent year on year. It might be 20 percent. The growing pressure on foreign exchange, inflation and balance of trade are major challenges for the government,” he said.

He termed the 12 percent high tax revenue target ambitious as the country is going through a challenging time amid pandemic.

“The allocation for ADP can have been cut as the progress of implementation is only 30 percent till March of this year,” Masrur Reaz added.