For compiling a pro-people budget

Prices of daily essentials to be kept stable: About 80 per cent of the people who are peasants living in rural areas have no means other than their agricultural products that comprise their per capita income. Floods, draughts, loan burdens, hike in transportation costs etc. often obstruct and frustrate their efforts to get the value of their products that results in decline of their per capita income. Maintaining the prices of daily essentials viz. food grains, edible oil, sugar, salt, clothes, medicine etc. at par helps them to a great extent to stabilise their income. Any hike in duty, tax or VAT at wholesale or retail level in the national budget will have a repercussion on the prices of those commodities at consumers' end. Similarly the prices of the implements used in agriculture like seeds, fertilizer, cost of irrigation (price of diesel) pesticides etc. need to be kept stable, or else subsidy has to be given. But due to corruption and weak administrative channels the subsidy would not reach the peasants intact. Hence it would be advisable and desirable not to give effect to price hike. Rather the root cause of price hike of agricultural implements, i.e. smuggling, should be controlled by vigilant army patrolling.

Stabilisation of transportation cost: Commuting and transportation cost is as important as food grains and essentials price in urban daily life. Increasing the prices of diesel invariably shoots the bus and other transports fare and drains the pockets of the common people. For the purpose of raising revenue price of octane can be raised. This will affect the rich and ultra-reach people who won't feel the heat so much. Conversion of all automobiles into CNG will benefit both the rich and the poor and the country as a whole by saving a lot of foreign currency. All government vehicles should be converted into CNG without delay for which provision should be made in the budget.

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Balanced distribution of income and wealth: During the last few years disparity in per capita income between the rich and the poor has widened. To prevent this widening gap, more revenue should be collected from the rich and less from the poor. No hike in duty, tax and VAT on daily essentials, coarse clothes, medicines, as mentioned before, should be effected in the budget, rather increase should be given effect in luxuries like big cars, deep fridges, large screen TVs etc. This measure will equalise and rationalise per capita income and wealth and reduce accumulation of black money.

Taxable income limit: In order to support the policy of "More income, more tax, less income, less tax" the taxable income limit should be raised and the tax slabs should be rationalised. This will render parity in distribution of wealth between the rich and the poor.

Austerity in public expenditure: Expenditure in running the state administration is a major head that comprises salaries and allowances, pension and gratuities, transport and traveling, printing and stationery, telecommunication, utilities, foreign tours, entertainment etc. False attendance in pay rolls, inflated bills of office expenses, traveling, tours and transport, entertainment must be controlled. Conversion of all vehicles into CNG will save 70 per cent of the transport cost. This will also reduce false and inflated claims in running of vehicles. Purchasing luxury cars, jeeps for the ministers, secretaries, projects etc. and running and maintenance of the same drain a lot of public money which is not befitting a poor country. In the long run sufficient car loans with soft terms may be allowed to the employees so that they may buy their own vehicles. This will save a lot of expenses. In the same way luxury in foreign tours should be avoided. The budget should reflect measures for all of the above.

Whitening and eliminating black money: According to economists an estimated amount of Taka 50,000 crore of black money is generated every year in the country. This figure is almost equivalent to yearly forecasted revenue of the budget. Evasion of duty, tax, VAT, resorting to bribe, theft, corruption, terrorism, secret transaction etc. are the sources of this black money accumulation. The administrative machinery could not control the generation of black money. Had it succeeded in control or eradication of black money, the revenue income of the country would have doubled. In order to force out this black money from the hiding dens, it is necessary that some opportunity/incentive should still be kept open for investing it in industries, factories, share market etc. so that it does not fly overseas. At the same time, measures should be adopted to seal the loopholes of generation of black money. Persons found to possess more wealth than their legal income should be brought to book and justice. The budget should consider all these matters.

Defaulted loans/tax: An estimated amount of Taka 20,000 crore is lying as defaulted/bad (classified) loans from the banking system of the country. This bad loans are playing an adverse role in the economy in so far as the government loses tax, VAT, excise duty etc. on this amount once it is classified or written off; it affects the liquidity and profitability of the banks substantially. A staggering sum was written off during the year 2004. One can guess the devastating effect of this writing off in the economy. By writing off the bad debts the banks are favouring a few of their customers while the general public is being deprived of the benefit from the revenue which could have been derived from these loans. The GDP as well as the development activities are hampered due to this.

The budget should provide for all measures to be taken by the banks for recovery of these loans. The courts may be given more powers to enforce attachment of property of defaulters for recovery.

ADP budget: Allocation of big sums in the ADP plan is not a bold step towards development. Projects which are of paramount importance to the general public, rural people, peasants and business men, unemployed youths etc. and those which will generate some temporary and permanent employment in the rural areas should be selected. Political consideration should not be the basis of selection of projects.

Control of crimes and enforcement of rule of law: All sincere efforts will be fruitless if terrorism, graft, forced donations, muggers are not stopped and rule of law is not established. The budget should propose appropriate measures and allocate funds for ensuring eradication of crimes and establishment of rule of law.

Ali Idris is a Chartered Accountant.