Kazi Zahidul Hasan :
The upcoming budget should increase spending on infrastructure development and social safety-net programme to help accelerate economic growth and poverty reduction, says a leading economist of the country.
“Investment in infrastructure and expansion of welfare benefits for the poor should be the particular areas of focus in the upcoming budget,” Dr A B Mirza Azizul Islam told The New Nation on Saturday.
He added that the government should ramp up infrastructure spending to build new roads, bridges, expand railways and improve port facilities because necessary investment in such strategic projects will lay the foundation for an even stronger economic future of the country.
“Apart from this, an increased budgetary allocation should be made to widen the social safety net programme to improve livelihood of the underprivileged people,” he added.
Mirza Aziz pointed out that in the fiscal 2008-09, the allocation for social safety-net programme was 17.3 per cent of the total budget. “But, the allocation in this purpose is continuing to decrease reaching it to 12.3 per cent in the outgoing fiscal (2014-15). “This should be a key area of attention in the next budget. Otherwise, the country’s poverty alleviation strategy would face serious set back,” he said, adding, “The programme should be properly monitored to give the benefit to the target group of people. Mirza Aziz, who presented the budget for the fiscal 2008-09 as the finance adviser of the then caretaker government, further said that an enhanced allocation should also be provided to education and health sector to reap the benefit of the country’s demographic dividend and welfare of the people.
Regarding the size of the upcoming budget, he said, the Finance Minister should not propose a mega size budget considering the economic reality of the country.
“The size of the next budget should be around Tk 2.35 trillion as the implementing agencies are not capable in implementing a big budget,” he said, adding, “If we go through our previous experience, we never been implemented the development programmes in line with the budgetary framework because of inherent structural weakness and inadequate capacity of the implementing agencies.” Earlier, Finance Minister AMA Muhith hinted that the size of the budget for the fiscal year 2015-16 would be around Tk 3 trillion, that to be presented in Parliament on June 4.
Responding to a question, Mirza Aziz said, only fiscal incentive and tax reform cannot boost the private sector investment rather a congenial political environment is needed to be restored in the country. He, however, suggested the government to adopt budgetary measures to bring down corporate tax and reduce duty on imported industrial raw materials to support the manufacturing sector. “Besides, the present ceiling on personal income tax should be maintained in the next budget,” he added.
He also stressed the need for more strategic reforms to simplify the present tax regime and suggested to rationalization of Value Added Tax (VAT) in line with the global practice.
