A pro-people budget is a need of time
FORMER Finance Minister AMA Muhith pointed out three major challenges; increasing the size of the national budget, realising more revenue, and improving the banking sector for his successor AHM Kamal who is going to unveil his first budget today in the Parliament. The octogenarian after presenting record number 12 budgets with leaving the economy in disorder expressed the opinion in an interview with a local newspaper. From the economic conundrum in share market, collapsed banking sector, debacle in remittance inflow, unfriendly business environment, shaky export-import, widespread corruption and development bubble --- when this is the overall situation of the economic sector; it will be really hard for the new minister to find out an escape route. Nevertheless, Muhith's suggestions are worthy.
Muhith said the size of the budget was low in relation to the gross domestic product because Bangladesh's tax-to-GDP ratio was the lowest in South Asia. During his tenure, the tax-to-GDP ratio rose from 9 per cent to 11 per cent, but it has to be raised to 15 per cent. Income tax accounts for only 30 to 35 per cent of the total revenue earned that should be 50 per cent. If it doesn't happen, efforts should be made to bring at least one crore people under the tax net within the next five years. Muhith said earnings from value-added tax (VAT) and Customs would increase automatically, and gave his support to multiple slabs of VAT. The bureaucrat-turned-politician said improving the condition of the banking sector is another challenge for the current Finance Minister. If a bank fails, it will create a serious crisis in the economy.
Muhith admitted he awarded many undue favours to the banks, which are needed to be controlled. Despite awarding a license for opening banks on political consideration, Muhith now opted for merging banks citing the number is too big. Muhith suggested for abandoning state-owned factories and losing enterprises. Sometimes, a defeated soldier knows the strategy to win as he tried but failed. The failed minister's suggestions are the reflections of his experience and the government can honestly follow the path to drive out the economy from the trap. What's true is that, we want a people-friendly pragmatic budget, not a tax-burdened one. A budget can't be a guideline to misuse hard-earned income of the common people. Â