Budget: Can it be implemented?

There is no mistaking the fact that the proposed budget is oversized -- in terms of income, expenditure and shortfall projections. The revenue and tax collection targets are set at such high notches that the government's institutional capacity will be put to a severe test, the kind of which it has not experienced before. Underachievement could precipitate a budgetary chaos.

While downsizing of the government, leaner and efficient administration, and a reasonably deficit-free budget are the global catch-words today, we are seemingly moving in the opposite direction. A bigger budget calls for a bigger handling capacity. Are we institutionally prepared for the task? The cap on fresh employment is likely to go, although there is overstaffing in certain areas. Where is the downsizing of the government? We are baffled by the bigger financial burden the government seems set to creak under, all of its own volition.

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Our second point has to do with the perceived 'transfer of resources' to the rural areas. Let's not forget, increased allocations to the rural sectors, hardly a novelty in the present case, did not lead to any real transfer of resource to the villages thus far. On the contrary, the poor have become poorer and the rich richer. Unless we have devolution of powers with a strong local self-government system in place, larger allocations by themselves cannot rule out the discrimination in resource distribution.

Raising the salaries of government functionaries has been long overdue. We are all for it. But it has a natural linkage to administrative reforms designed to raise the level of their efficiency; we can hardly gloss that over. The recruitment and promotion rules will have to be kept above political caprice as part of a comprehensive services reorganisation dispensation.

At the heart of the tax discourse has been the idea of expanding the direct tax base; but it is indirect taxation whose incidence falls on the common man that has been taken recourse to in a good measure.

The fiscal measures to alleviate the post-MFA handicaps for the RMG sector left more to be desired. Only a Tk 20-crore provision to absorb those who are likely to be retrenched, hardly goes far enough. Government needs to fiscally facilitate our garment industries' effective transition to the post-MFA era. On another pillar of our economic strength i.e. foreign remittances, the budget remains silent over the question of breaking new grounds. No fresh incentive has been provided to draw investments from the Bangladeshi Diaspora.