Wanted a truly pro-people budget

At a pre-budget discussion with the members of the Economic Reporter's Forum (ERF), held on April 25, the finance minister said, 'The budget will certainly be election-oriented. We're a democratic government. If we renege on our commitments, we will betray the cause of the people.' He also said that the next budget would be prepared on the basis of 'sound economic policy.' But he insisted that the government could hardly afford to ignore the people given that it's a democratic government and that the parliamentary elections are scheduled for late 2006. He also assured that he would try to minimise pressures from the ruling party lawmakers while undertaking politically-motivated projects. The finance minister, however, said that the next budget would be formulated in keeping with the goal of the Poverty Reduction Strategy Paper (PRSP) and the Millennium Development Goals (MDG) halving poverty in the country by 2015.

A pre-budget discussion meeting was also held on April 24 at the office of the finance minister, which was attended by the leading economists of the country, including former finance minister M Syeduzzaman and former adviser to the caretaker government Hafizuddin Khan who urged the government to increase allocations for agriculture and its research in the next budget. Later, finance minister M. Saifur Rahman, exchanged views with the editors of national dailies and senior journalists on the upcoming budget. Asked whether he would say good bye to the International Monetary Fund (IMF) from the next fiscal year as has been announced by Pakistan, the Finance Minster ruled out the possibility and said, "No country can say good bye to IMF".

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The editors of the national dailies and news agencies opined that the next budget should put in place stringent measures to ensure the proper utilisation of resources by cutting back wastes and corruption with a view to achieving the greater budgetary targets for economic development of the country. They also put forward suggestions that the government should pay heed to the World Bank, IMF and some other donor agencies only to the proportion of their development assistance. Referring to the excesses that the donor agencies often make in terms of policy prescription to the government to the detriment of the country's interest, they said the next budget should try to attain further reliance on domestic resources to reduce dependence on others.

The leading economists of the country have warned finance minister of the dreadful danger of a pro-election budget for the next fiscal year. But the lawmakers of the ruling party, on the other hand, have requested him for special budgetary allocations targeting the next general election. The chairmen and the members of the Parliamentary Standing Committees on different ministries and other parliamentary bodies at the pre-budget meeting held on April 26, have demanded for enhanced allocation of Taka one crore for each member of parliament in the forthcoming national budget, for development projects in their respective areas. Otherwise, they may face setback in the next general election. But the finance minister did not give any clear reply in this connection. He only said," I shall not do anything that may break the financial discipline in the next budget."

The predominance of the neo-liberal economic considerations dictated by the donor agencies reflected in the national budgets has forced many governments of the developing countries like Bangladesh to withdraw budgetary allocations from public expenditure programmes, as the donors have come up with a new prescription for poverty alleviation in the developing countries. The MDG as conceived by the United Nations aiming at reducing global poverty by half by 2015 and the PRSP that the World Bank and the IMF had initiated, imposed the condition on the recipient governments that their national budgets should be MDG and PRSP oriented. The finance minister, however, said that with the contribution of aid to GDP (gross domestic product) going down, the government cannot afford to run at the direction of donors. It is learnt that the aid-GDP ratio has come down to two percent at present.

As indicated by the finance minister at the pre-budget discussions, a bigger budget of sound economic policy is on the anvil despite of resource constraints. The government raised the existing old-age pension structure by 10 percent from Tk 150 to Tk 165 in the last budget aiming to benefit 12 lakh elderly people of the country. The government should consider increasing the number of recipients of allowances for widowed, deserted and destitute women. No budget can truly be described as the pro-poor budget unless it provides social safety net for the poorer segment of the society.

The economists and the civil society leaders want that budget making process should be more democratic and participatory, but a section of government officials are opposing the idea stating that the government should not allow leaking of information prior to the announcement of the upcoming budget. But the Chairman of the National Broad of Revenue (NBR), for the first time in the history, disclosed some budgetary measures to be taken for the 2005-06 fiscal year. He informed the media and business people that the government was no longer in favour of continuing tax holiday for new industries and "is likely to impose tax on all the newcomers in industrial field." He also disclosed that the government was going to withdraw zero tariff facility in importing 519 category of items and would impose tax on importing basic goods and capital machinery for industry.

The finance minister has assured the people that the upcoming budget would be prepared on the basis of 'sound economic policy', and poverty reduction will be the main thrust. It is not for the first time that the finance minister has pledged to provide special budgetary allocations for poverty reduction. It has rather become a tradition for the finance ministers of the successive governments to pledge for a pro-poor budget. But whatever the reality on the ground, the poor segments of the society never get the benefits as promised, while the economic disparity between the poor and other beneficiaries of the budget continues to grow over the period.

The people of this country have so far seen a good number of budgets labeled as pro-poor, pro-people etc. It really sounds nice, though it is nothing more than the old wine in new bottle. The budget for 2004-05 was labeled as village-focussed budget, though nothing was done to give a real boost to the rural economy. The upcoming budget is very important in respect of policy. Because four-party alliance government may like to make it an election-focussed budget. With value taka eroding fast and prices of essentials on continuous escalation, the common people are the target of upcoming budgetary assault. The common people have no say in this regard as they have no forum, although they are the overwhelming majority. Let us hope that the most experienced finance minister, will not merely juggle the figures to impress the common people and must not be politically convinced by his colleagues in the Parliament for a pro-election budget ignoring concerns of the common people. The forthcoming budget must also identify itself in a clear term that it is a pro-people budget.

ANM Nurul Haque is a banker.