Poor, low-income groups to bear the tax burden

Budget fails to address social sector spending: Economists

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Staff Reporter :
The government has failed to implement the national budget in its entirety almost every year although it always proposes bloated expenditures, economists have said.
They expressed their grave concern over the qualitative utilization of the public money and said the proposed budget has fallen far short of addressing dwindling social sector spending.
The economists also said the proposed budget has put much higher tax on the poor and low-income groups than that of the rich and high-income groups.
Criticizing the proposed bloated expenditures, they said the government has failed to implement the national budget in its entirety almost every year.
“Although the national budget size is increasing every year, the quality of expenditure is coming under scrutiny,” said Rashed Al Mahmud Titumir, Chairperson, Unnayan Onneshan, 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,” he added.
He also notes, “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.” Titumir said, “Amid 7.0 per cent downward revision of the outgoing financial year’s budget (FY2016-17), the government has proposed a whopping expenditure outlay target of over Tk 4.0 trillion for the next FY2018. It may not create a fruitful outcome.”
In the outgoing FY2017, the government cut its budget spending target by Tk 234.31 billion to Tk 3.17 trillion (16.2 per cent of GDP) from its original allocation of Tk 3.40 trillion (17.4 per cent of GDP).
Similarly, the government trimmed the national budget expenditures at the end of every financial year in the past.
In the FY2016, the government was able to spend Tk 2.64 trillion, 89.41 per cent of its proposed Tk 2.95 trillion expenditure target in the national budget.
In the FY2015, it spent Tk 2.04 trillion — 85.35 per cent-at the end of the year from its original Tk 2.39 trillion target in the national budget.
Another economist Dr Ahsan H Mansur said, “Every year the government announced a bloated budget. However, at the end of the year it cut the expenditures by nearly 17-20 per cent due to incapability.”
“Although the expenditure target is being raised by nearly 20-24 per cent every year, there is a big question about the state of quality of public services, law enforcement, and development works. I think these are not improving at the expected level,” Dr Mansur said.
He said the government every year announces an ambitious budget for using public funds for improving the country’s infrastructure, but services of public agencies are totally absent in this regard.
Eminent economist Professor Wahiduddin Mahmud in a post-budget reaction said the real concerns about public investment are not about meeting the spending target, but more to do with the poor quality of project implementation resulting in cost and time overruns.
The provision of ‘first track’ implementation of the large prioritised projects is no guarantee that the situation will improve.
“For the last few years, total investment in the economy, private and public combined, has lagged behind domestic savings, with foreign aid representing even more additional supply of investible resources. That indicates a serious problem of investment tardiness. There is thus a case for setting a high target for public sector investment, albeit within the implementation capacity,” he added.
Distinguish Fellow of the Centre for Policy Dialogue (CPD) Dr Debapriya Bhattacharya in the post-budget reaction said the government used to propose a bloated budget but at the end of the year, it could not use its entire outlay.
He questioned the quality of the development expenditure of the government.

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