Budget suggestions
THE current global crisis has sounded the death-knell of market fundamentalism. Strong regulatory systems must be in place in all countries to ensure effective market governance. Moreover, it has to be realised that there is a need for a strong and effective state to redistribute income in favour of the exploited common people and to rein in the predatory whims of the rich and powerful in the society.
The present crisis should not be seen as ushering the end of capitalism per se, but the present version of unbridled capitalism must change. For developing and least developed countries situated at the periphery of the world capitalist system, the lesson from the present crisis should be the prioritisation of self-reliance in the path of achieving development.
The people of these countries should re-double their struggle to establish truly democratic governments in order to come out of the "dependency trap" of the neo-imperialist world capitalist system. The system of expropriation and appropriation of surplus remains our main economic issue.
Therefore, in the 2009-10 budget, we want a courageous re-orientation of the government's policy priorities to transform the fiscal policy regime of the government into a powerful weapon of redistribution of income and wealth in favour of the disadvantaged majority of the people of Bangladesh.
It has been predicted by different research bodies of Bangladesh that the growth rate of GDP of Bangladesh will be around 6 per cent in the year 2008-09 in spite of the current world crisis. There are increasing numbers of worldwide predictions that the world recession is showing signs of a turn around by the beginning of the year 2010.
In the light of this unfolding scenario, our policy makers should not announce any more special doles for any other sectors in the next budget. Rather, they should give top priority to the goal of arresting the process of increasing inequality of income distribution through proper fiscal policy changes, the major dimensions of which may be the following:
In real terms, the defence budget should be frozen at the current proportion of the government expenditure, including the hidden portions of the defence expenditure. In the subsequent budgets, the government should boldly move toward actual reduction in defence expenditure of the country in order to free budgetary resources for more pressing needs like education, health and infrastructure development.
The revenue expenditure allocations for civil administration and internal security should also be frozen in real terms. These two heads should also be targeted for subsequent reduction in future. The ICT revolution and the prospects for e-governance have brought real opportunities for Bangladesh to achieve such reductions of budgetary resources through downsizing the government machinery, if we really want to.
The budget should give maximum efforts for expanding the income tax net of the country. It is a shame that fewer than 700,000 tax payers actually pay income tax in a country of 150 million people.
The government should severely restrict the sectors which are enjoying tax holiday benefits. Such benefits cannot continue indefinitely. This benefit is widely misused by our businessmen and owners of industrial enterprises. Only the disadvantaged areas and sectors should enjoy such benefits.
Energy in general and electricity generation in particular should be declared the thrust sector in the next budget. The idea of public-private partnership (PPP) should also be tried through the stock market to attract investment in the field of electricity generation.
Infrastructure such as the Padma Bridge, the Dhaka Elevated Expressway, the Dhaka-Chittagong Four Lane Highway, the Dhaka-Laksham Railway, etc may also be targeted for PPP.
The agricultural price support and input subsidy programs should get due priority in the budget.
Targeted rationing of food grain at Tk. 10 per kg should be introduced for garments workers, slum dwellers, agricultural labourers, class four employees, industrial low-wage workers, etc.
It is to be remembered that the common people of Bangladesh should get the budgetary facilities, not the privileged sections of the population. Therefore, if the budget can give some relief to these majority groups of consumers, that will help increase the aggregate demand in the country, which is the true anti-recessionary step for any economy. Moreover, if the suggested steps can be taken, the inequality-augmenting policy regime will take a sharp turn in favour of the common people of Bangladesh.
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