The priorities of the proposed budget for fiscal year 2022-23 go against the previous policies declared by the government itself, the South Asian Network on Economic Modeling (SANEM) has said.
The organisation came up with the observation at a budget review session at the BRAC Center Inn in the capital on Monday. Sayema Haque, research director of SANEM, also shed light on different aspects of the proposed budget.
Although the last five-year plan and the perspective plan incorporated poverty alleviation, employment creation and poverty-friendly policy adoption, the proposed budget overlooked these issues and appeared as highly business-friendly, the organisation pointed out.
SANEM executive director Selim Raihan said the corporate tax cut proposed in the budget for FY23 is applicable for the big businesses. But the small, very small and medium businesses suffered the most from the Covid-19 pandemic in the last two years, he added.
Selim Raihan said they received no remarkable assistance in the recovery process from the Covid shock and the corporate tax cut measure also is not meant for them. A maximum number of people are engaged in this sector.
Bringing laundered money back
In the post-budget discussion, the issue of bringing laundered money back home has outshined the basic structure of the budget. The initiative of recovering the laundered money is completely unethical, Selim Raihan observed.
Expressing SANEM’s disapproval to the initiative, Selim Raihan said a question should be raised on how the money was laundered, instead of taking steps to bring it back. The launderers deserve no reward, rather punishment.
While presenting SANEM’s budget review at the event, Sayema Haque said the nation is going through a high inflation, which requires an increased allocation for the social safety sector. But the social safety allocation decreased in the proposed budget, which is also against the previous policies.
According to the eighth five-year plan, the government was supposed to allocate 2 per cent of the gross domestic product (GDP) for the social safety sector. But in the proposed budget for FY23, the actual allocation for social safety, excluding pension, stipend and interests, remains much lower than the advocated figure. Even the new allocation is lower than that of previous year.
According to SANEM, there was a need to increase the per capita social allowance considering the high inflation. The think tank had proposed to increase allocation for the open-market-sale (OMS) initiative, but the allocation, on the contrary, has been downsized in the proposed budget.
Apart from that, the commodity price may fall in the domestic market if duty on imported goods is relaxed. SANEM thinks that inflation should be tackled by adjusting the monetary and revenue policies. The inflationary pressure would intensify if the fuel price is increased further.
Summit on disparity and poverty
There are no government statistics on disparity since 2016. According to the 2016 statistics, some 38 per cent of the country’s total assets are held by the rich who make 10 per cent of the population. This discrimination widened amid the pandemic.
Sayema Haque has suggested reforms of the tax structure to minimize the disparity. She proposed to impose tax in proportion to people's assets.
Currently, there is a lack of updated data on different issues. The last household income and expenditure survey was conducted in 2016 while the labour force survey in 2017. The government did not find any interest in assessing the ground scenario and collecting the updated data on these issues amid the pandemic or in the subsequent eased-up situation.
Even the surveys carried out by the non-government organisations are being thrown into question. Against such a backdrop, Selim Raihan put forward a proposal for holding a summit on poverty, disparity, labor market and some other similar issues.
He also noted that the government or Bangladesh Institute of Development Studies (BIDS) may take an initiative in this regard. The non-government research entities are ready to discuss their surveys in detail.
There might be controversy on the survey method, but poverty, disparity, labour market and similar issues can be discussed in detail at the summit. “We are highly interested to attend such events,” he added.
Regarding the overall economic stability, SANEM said they support the recent trend of leaving the dollar price on market. However, the think tank proposed a slash in the incentive for overseas income.
SANEM researchers also attend the event.