Staff Reporter :
The proposals in the budget for FY 2017-18 have fallen far short of addressing high prices of essentials, sluggish growth in real estate sector, rising jobless, dwindling social sector spending and institutional weakness, said a press statement issued by Unnayan Onnesha, an independent multidisciplinary research organization.
The budget speech seems to have lacked providing prudent and farsighted solutions to the current challenges except it earmarks an ambitious target of expenditure amidst inefficient distribution of resources and cost overrun, the UO said in its rapid assessment of the proposed national budget.
The Finance Minister concedes ‘still have many miles to cover’, and stops ‘by woods on a snowy evening’ (the title of the poem that he quotes is ‘Stopping by Woods on a Snowy Evening’).
The fiscal strategies must take account of the circumstances of inflationary pressure caused by new VAT policy-induced declining real wages, rising joblessness in the midst of productive capacity-expansion-less growth and dwindling social sector spending in the milieu of institution-wrecking structural diseases, driven by political expediency.
The UO notes that the political expediency has not only caused cost-overruns, scams and capital flight, but the reign of uncertainty that kept the ratio of private investment to gross domestic product (GDP) stagnated over the years, slowed down growth in manufacturing resulting in underperformance in external sector.
The research organisation noted that the youth unemployment rate in Bangladesh is higher than the regional South Asian average, with a huge sizeable youth population languishing
in as NEET (not in employment, education or training).
Pointing to the underachievement of NBR tax revenue collection in recent years, the UO expressed doubts that the NBR target of collecting tax revenue of Tk 248,190 crore may not be feasible in FY 2017-18, whereas a gap of Tk 18,152 crore has been found between the budget and revised NBR tax in FY 2016-17.
In addition, a breakdown of NBR tax shows that Tk 85,176 crore will be collected from taxes on income and profit whereas Tk 91,254 crore will be collected from Value Added Tax (VAT), meaning that the burden of the tax on the poor and low-income groups is much higher that on the rich and high-income groups.
The higher rate of VAT will lead to price hike hurting the livelihood of the poor, UO also said.
“The tax structure is ridden with low base, avoidance and evasion. There is huge missing of distributive justice, characterised by widening income, spatial and male-female inequalities, driven by jobless growth. As a result, need for a pro-active state that would ensure social protection through innovation in social policies is pressing,” read the statement.
The proposals in the budget for FY 2017-18 have fallen far short of addressing high prices of essentials, sluggish growth in real estate sector, rising jobless, dwindling social sector spending and institutional weakness, said a press statement issued by Unnayan Onnesha, an independent multidisciplinary research organization.
The budget speech seems to have lacked providing prudent and farsighted solutions to the current challenges except it earmarks an ambitious target of expenditure amidst inefficient distribution of resources and cost overrun, the UO said in its rapid assessment of the proposed national budget.
The Finance Minister concedes ‘still have many miles to cover’, and stops ‘by woods on a snowy evening’ (the title of the poem that he quotes is ‘Stopping by Woods on a Snowy Evening’).
The fiscal strategies must take account of the circumstances of inflationary pressure caused by new VAT policy-induced declining real wages, rising joblessness in the midst of productive capacity-expansion-less growth and dwindling social sector spending in the milieu of institution-wrecking structural diseases, driven by political expediency.
The UO notes that the political expediency has not only caused cost-overruns, scams and capital flight, but the reign of uncertainty that kept the ratio of private investment to gross domestic product (GDP) stagnated over the years, slowed down growth in manufacturing resulting in underperformance in external sector.
The research organisation noted that the youth unemployment rate in Bangladesh is higher than the regional South Asian average, with a huge sizeable youth population languishing
in as NEET (not in employment, education or training).
Pointing to the underachievement of NBR tax revenue collection in recent years, the UO expressed doubts that the NBR target of collecting tax revenue of Tk 248,190 crore may not be feasible in FY 2017-18, whereas a gap of Tk 18,152 crore has been found between the budget and revised NBR tax in FY 2016-17.
In addition, a breakdown of NBR tax shows that Tk 85,176 crore will be collected from taxes on income and profit whereas Tk 91,254 crore will be collected from Value Added Tax (VAT), meaning that the burden of the tax on the poor and low-income groups is much higher that on the rich and high-income groups.
The higher rate of VAT will lead to price hike hurting the livelihood of the poor, UO also said.
“The tax structure is ridden with low base, avoidance and evasion. There is huge missing of distributive justice, characterised by widening income, spatial and male-female inequalities, driven by jobless growth. As a result, need for a pro-active state that would ensure social protection through innovation in social policies is pressing,” read the statement.
