Power, politics and public purse

There had always been reactions to the budget -- positive, negative or both. Some reactions are also rhetoric in the sense that critics want a wholesale solution for socio economic ills from a particular budget. But the current budget seems to have invoked more criticisms than the earlier ones. I find that there are sufficient flesh in the arguments of the critics and, possibly, lesser substance in the points to counter them with. While the space does not allow for detailed discussions on every aspect of the budget, allow me to finger at a few.

Black vs white
I remember, the FM once remarked that whitening of black money is not a practice usually in evidence in a civilized society. And, therefore, it was expected that he would have stood against such a step to allow black money holders go unchallenged. But to the utter dismay of the countrymen, this budget intends to back up black money holders and provide a green signal to them to go for the whitening exercise. Of course, personally I was not moved or convinced by the utterances of our FM. My pessimism rested on the simple ground that a country where politics is dominated by black money and where politics determine policies, such a "revolutionary" step is unlikely to be taken. Disconcertingly though, apparently the budget appeases the black money holders and goes to tax the relatively white money holders in terms of taxes and other facilities. Given that the next general election is almost in the vicinity, as critics would argue, black money holders need to be appeased for the very dynamics of politics in the country. After all, money matters in election, no matter whether black or white. While the FM could be right in saying that economic realities have made him change his decisions, the countrymen need to know what these realities are and whether they would evaporate within just a year or so.

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Big vs small
I also recollect, how the present FM vehemently criticised the earlier government for preparing an ADP, in his opinion, based on political considerations. He also dubbed the last budget of the last government as ambitious and unrealisable. But this year's budget aims for a bigger ADP than ever embracing ambitious projects. Most of the projects relate to roads and culverts. Well, there is no doubt that roads and culverts contribute to poverty reduction, but they also contribute to corruption. Besides, compared to the performance of the ADPs of the last government, the performance of the last fiscal of the present government looks pale. For example, while about 90 percent of the target was achieved during the last government, only three-fourths were achieved during the last four ADPs of the present government. A big ADP does never imply that there is going to be a big leap forward unless the projects are economically devised, regularly monitored and quickly implemented. We are told that only 46 percent of the ADP targets of the last fiscal were achieved so far. The absorption capacity of the governmental machinery in implementing such a big budget seemingly was missed out.

One could criticise that the FM had pressed home the political considerations of his party through the budget. More money would pour in rural areas no matter whether the projects are worthy of consideration, whether people would like them or not. But definitely that could help political aims to lure voters in the next general elections.

Inching inflation
The economy is faced with twin troubles. On the one hand, inflation rate is inching up and trade deficit is being widened. The cause of inflation is just not the rise in the prices of food items but also of non-food items. Due to import surge, the reserve situation is seemingly under pressure. On the heels of these events, the macro economic indicators might face turbulence with the implementation of the national pay scale, the money flows under the umbrella of ADP and revenue heads.

Poverty and inequality
The revenue target in the last fiscal could not be met while the revenue expenditures have escalated over time. It remains to be seen how the revenue target of the current fiscal year could come true. In the budget speech of the FM, we notice no direction of how to cut down revenue expenses. But while unproductive expenses have been rising, there seems to be lesser allocation for the marginalised segment of the society. Inequality of income has been soaring implying that the share of the incremental growth went to the few fortunate in the society. The annual decline in poverty is, reportedly, 1 percentage point while we need to go by 3.5 percentage point a year to achieve the MDGs. The FM could hardly address the issues of grave concerns.

Grievous governance
The success of a budget does not depend only on allocation of resources. Bad governance would jeopardise the targets. There is no doubt that the country is faced with worst kind of governance now than ever before. Call it human rights, freedom of speech or rule of law, the society is gradually falling behind. The Judiciary could not be separated from the executive for the last four years. The opposition could not be provoked to join parliament. Public universities are on the brink of ruination due to hoodlums created by the political cadres of the ruling party. We expected that the FM would come out with a detailed account of the grievous governance issue and suggest the ways his government would face the problems.

Budget and bailouts
By and large, the budget appears to be a "political" budget where political considerations occupied the front seat in terms of resource allocation. It may seem that the budget might bail out the government till and through the polls. But given the soaring prices of commodities, rising unemployment and deteriorating law and order situation, it remains to be seen how far the budget would bail out the parties in power in the next general election. Apparently we see no vision in the budget but, of course, we witness a mission to go to power again by using public purse. Let economics lament till the next election.

Abdul Bayes is a Professsor of Economics at Jahangirnagar University.