The budget
The Finance Minister AMA Muhith has proposed his budget for 2017-2018 fiscal with the total outlay at Tk. 4,00,266 crore. The largest ever budget in the countrys history might generate complacency among some people simply because of its staggering size, but many may find the budget discouraging as it will increase the cost of living. The complete implementation of 2012 VAT law with the uniform rate of VAT at 15 per cent will shoot up the prices of commodities. For meeting the expenditure of this budget, the finance minister has also imposed tax on bank deposit. As the price of electricity will increase, it will create a domino effect on the prices of other commodities as well.
These aspects of the budget are enough to create frustration among a large section of people. Due to excise duty, people are already expressing their sentiments that they would avoid keeping money in banks, which will not favour the countrys present investment scenario also. The implementation of this huge budget, with a 35 per cent increase in size from the last years budget, may prove to be difficult. Some front ranking economists have called this years budget ambitious and unrealistic.
To be sure, a budget with a staggering TK 106,772 crore deficit will warrant for mobilisation of more revenue from the domestic sources. Then the government will have to borrow money from banks, which in turn will have its bearings on the private sector, impacting negatively the investment situation. Moreover, it will also be difficult for the NBR to collect Tk 293,494 crore as it has limitations.
To enable NBR in its activities, it has to expand its manpower and efficiency. There are hundreds and thousands of people of the country whose annual income are taxable but do not pay tax. That is why we believe that NBRs capacity has to be strengthened more and it should take tougher stance on people who avoid genuine tax.
There are, however, some very positive sides of the budget. The finance minister has rightly placed focus on improving the countrys communications infrastructure and proposed substantial increase of fund for the sector. The education sector has also been given due attention. The proposal to increase tax on tobacco and tobacco products including cigarettes is heartening as it would discourage smoking. And though decrease from the current 15 per cent VAT has not been proposed, some other demands of business people have been addressed in the budget. But the expediting of the process of implementation of Annual Development Programme (ADP) will also continue to be a major challenge in the coming fiscal as most of the economists have pointed out.
