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A different budget with a cautionary approach

Published : Saturday, 15 June, 2019 at 12:00 AM  Count : 194

A different budget with a cautionary approach

A different budget with a cautionary approach

Finance Minister AHM Mustafa Kamal yesterday unveiled the national budget for 2019-20 fiscal year with an outlay of Tk 5,23,190 crore, showing a cautionary approach. At the forefront of the government's cautionary move is maintaining a status quo and not imposing any new tax or value added tax (VAT) in the new budget. Another cautionary measure in this year's budget is Kamal's proposal of continuing the existing VAT exemption facility in the case of government's priority and fast-track projects, such as the Bangladesh Economic Zone (BEZA) and the public-private partnership (PPP) projects.

He had earlier talked about a truncated budget speech this year, breaking the tradition of presenting a 100-page document. His budget speech at Parliament yesterday was indeed brief as he felt unwell and Prime Minister Sheikh Hasina took on the task of presenting the remainder of the budget from him. While this breaks the ritual, the Tk 5, 23,190-crore budget barely does: it marks a usual increase in size. The fact, however, His debutant budget, which represents 18.1 per cent of Bangladesh's GDP, barely has anything that can create a rippling effect in the country's business community or among the tax-paying citizens.

There has been no significant change in the allocation to the education sector which has remained nearly stagnant in percentage terms. Allocation to the health sector has been set at 5.63 percent of total budget outlay this time, up slightly from 5 percent last year. Allocation to the power and energy sector has gone up significantly by 5.84 percent. Other than that, there haven't been many other radical shifts. One point of note though is that the government has again provided scope to whiten black money, subject to investment in the industrial sector.

On the plus side, the government has proposed a two percent incentive on money remitted by expatriates to encourage Bangladeshis to send money into the country from abroad using official channels. And allocation to the social safety net has been increased. The bottom-line, like all previous years it will remain a big challenge for the government to collect its targeted revenue.  Our expectation from the government is to ensure efficient use of the budget, cutting back on wastage from previous years while tackling the latest budget's deficiency with well--organised strategies. 

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