Staff Reporter :The fixed income groups comprising lower and middle class families have to adjust their expenditure within the budget line and are adversely affected by any upward swing in the cost of product while cost of labour remained unchanged. The fixed income middle income citizens have a sharp erosion of their purchasing power in the last few years. Inflation for the non-food items has reached double digit, not to come down in the near future, leading economist Professor Abul Barakat said. Non-food items are important for the middle class, citizens who are used to a certain standard of living that cannot be curtailed without a psychological shock, another economist said. Prices of most for the commodities and assets that the middle class needs most have increased. House rent, doctor’s fee and hospital charges, house hold expenditure, dues for clubs, venue charges for community halls and hotels were cited as some examples affecting the life of middle class families.Large number of the country’s total population are still poor,” Prof Barakat said. Though the government has reduced population growth and improved health and education, around 91.8 million out of more than 150 million are poor, revealed a recent study titled ” Emerging Middle Class and Consumer Market in Bangladesh”. Meanwhile, the number of poor people has increased by 38.9 million over the past 25 years (1984-2010), the study said. “This increase of poor population is a clear reflection of the failure of the National Development Policy,” Prof Barakat who is also president of Bangladesh Economic Association (BEA) said. He said about 31.3 percent people of the country are middle class while 2.7 percent are rich or affluent. A family with fixed income whose monthly electricity bill shot from Tk 3,000 to Tk 7,000 a month. The fuel bill for the family vehicle has also increased by at least Tk 3000 a month in the last few years. Last year the advance income tax deduction was Tk 15000 but it increased to Tk 30,000 at a time, a middle class serviceholder said. A few years back employees of government and autonomous bodies did not have to pay any tax on their salaried income as their salary was deemed to be tax paid. Now they have to pay tax on their income from their pocket, he said. A car in a middle class family is now a necessity given the road condition and traffic situation in the metropolis. A small plot of land, a moderate flat or a small house, a private residence in a mofussil town, a television and an instant power system (IPS) are no more seen as luxury items as these are part of modern life, another source said. These should not be taxed with a vengeance rather these should be treated as the normal possession of a middle class family. Those who craft the fiscal and monetary policy apparently belong to middle class. They are supposed to have understanding for the fellow members of the society if they live on limited earned income. But it is intriguing to see that they instead seem to treat the middle class as the sitting duck to meet their targets, another source said. Bangladesh has come a long way from being perceived as the “basket case” of early 1970s, Tareq Hossain Khan, a teacher at Jagannath University said. The humiliating term was used for countries that would always depend on aid. Its people are crammed onto a flood plain swept by cyclones and without big mineral and other natural resources, he said. Bangladesh achieved a good economic growth rate of around 5 to 6.5 percent in the last decade, despite frequent strikes and other political disruptions. The middle class is now less dependent on the government or state enterprises for jobs and income, he said. The growth of middle class has been attributed to a rapidly growing service sector, increasing inflow of migrant remittances, which by far, outweighs foreign aid, and the new trend among the young to go for self-employment and entrepreneurship. Bangladesh’s export now total around $ 30 billion, and 78 percent of which are garment exports. The vertical raising of garment sector fuels the raising of middle class. Tareq Hossain Khan said in terms of income structure the top 10% control about two fifth of the total national income of Bangladesh. As in other Asian countries, the gap between rich and the poor has widened in Bangladesh, giving rise to social tensions and sometimes-violent protests, he said. The country is growing fast but the biggest challenge is how to ensure a balanced growth when the rich are overtaking the poor, said another economist.
