THE NATIONAL BUDGET 2002/03 : SALIENT FEATURES
The National Budget 2002/03 of Bangladesh was placed before Parliament on June 6, 2002. It was the eighth national budget placed before Parliament by Humble Finance Minister M. Saifur Rahman. After detailed discussions, the budget was passed by Parliament on June 29, 2002.
BUDGET HIGHLIGHTS
The following are the highlights of the Budget 2002-03 :
· Total outlay of The Budget is Tk. 448.54 billion including Revenue Expenditure and Annual Development Program (ADP) of Tk. 239.72 billion and Tk. 192.0 billion respectively.
· Revenue Receipts (excluding foreign grants, foreign loans and net outlay on food account) are projected at Tk. 330.84 billion which is 20 percent higher than the Revenue Receipts in the Revised Budget of 2001-02.
· The overall fiscal deficit in the Budget is programmed at 4 percent compared to an average of 6 percent during the past couple of years.
· The sources of resources along with their proportions in the Revenue Budget are: tax revenue 57 percent, non-tax revenue 17 percent, domestic financing 12 percent and foreign financing 14 percent.
· 55 percent of ADP would be funded from domestic resources.
· Education, with 14.2%, has received the highest allocation of resources followed by transport and communication 13%, energy and power 8%, Health 7%, local government and rural development 9% and agriculture 7%.
· To increase the flow of remittances and encourage investment in the economy, all remittances through banking channels of a resident Bangladeshi and a Bangladeshi working abroad have been unconditionally exempted from taxes.
MAIN THRUST OF THE BUDGET 2002/03
The Budget 2002/03 has been formulated with an overarching goal of bringing back fiscal discipline in the Bangladesh economy within the broad objectives of forging a good quality macroeconomic management.
While rationalization of revenue receipts and development expenditures since October 2001 enabled the present Government to contain the overall fiscal deficit in the revised budget of 2001/02 to about 4.4 percent compared to 5.5 percent envisaged by the previous Government, the Budget 2002/03 sets a goal of containing the overall fiscal deficit to 4 percent. The figure had averaged nearly 6 percent during the past couple of years.
The budget has been drawn conterminously with the first draft of a three-year National Strategy for Growth and Poverty Reduction to be subsequently converted into a Poverty Reduction Strategy Paper (PRSP) which will provide the basis for holding dialogues with the development partners. The Budget 2002/03 will provide a building block towards implementing necessary administrative and economic reforms to implement the National Strategy for Economic Growth and Poverty Reduction.
A three-year macroeconomic framework will be developed and the Budget 2002/03 aims at providing early fiscal support to that framework. The Government is committed to reducing the budget deficit within the sustainable limit, augmenting domestic resource mobilization to gradually achieve self-reliance and scaling down domestic borrowing by the public sector. And the National budget of 2002/03 adopts strategies and policies to achieve those goals.
The Government recognizes that it is impossible for a nation to survive in the modern competitive world without economic reforms. The programs that the Government had taken under Structural Adjustment Reforms during 1992-96 were stalled subsequently. The World Bank commented in March 2002 that “Little progress has been made in further liberalization since the mid-1990s; rather some back-pedaling was evident in that import bans/restrictions were added to the existing list for trade (protective) reasons, and the top tariff rate has held its ground since 1998”.
The World Bank also observed that the Government in the past couple of years applied rampant tariff and non-tariff measures thereby increasing the level of nominal trade-protection in the country. The present Government is firmly committed to implement various reform programs in order to improve upon the existing situation. The Budget 2002-2003 is viewed by the Government as an instrument to support the objective of macroeconomic stability and initiation of reforms in taxation regime.
REVENUE AND EXPENDITURE AT A GLANCE
The following tables provide some broad statistics of revenue and expenditure proposed in the Budget 2002-03 and also compares them with the statistics obtained in the Revised Budgets of 2000-01 and 2001-02 respectively.
Table 1
Revenue Receipts
(Excluding Grants, Loans and Food Account Transactions)
(Taka billion in respective year’s prices)
Budget Revised Budget Revised Budget
2002-03 2001-02 2000-01
Tax Revenue 255.0 219.3 194.9
of which
NBR 237.5 207.3 183.0
Non-NBR 17.5 12.0 11.9
Non-Tax Revenue 75.84 57.40 46.83
Total : 330.84 276.70 241.73
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Table 2
Revenue Expenditure
(Taka billion in respective year’s prices)
Budget Revised Budget Revised Budget
2002-03 2001-02 2000-01
Total Revenue Expenditure 245.73 230.25 206.61
of which
(a) Pay and Allowances 73.19 68.01 64.76
(b) Goods & Services 36.12 34.52 33.22
(c) Interest Payments 46.14 45.20 41.89
(d) Subsidies and Transfers 65.73 59.15 43.65
(e) Acquisition of Assets & 10.16 11.06 10.36
Works
(f) Block Allocations 14.39 12.31 12.73
REVENUE RECEIPTS
The Budget 2002-03 aims at a revenue growth of 20 percent. Tax revenue, which has a weight age of 77 percent in the total revenue, is projected to grow by 16 percent and non-tax revenue is estimated to grow by 32 percent. Within the kitty of tax revenue NBR has a share of more than 90 percent, the major sources of its revenue being value added tax (VAT), custom or import duty and income tax. Within the non-NBR portion, non-judicial stamp accounts for two-thirds of revenue which is projected to grow by 37 percent during 2002-03.
The detailed fiscal measures suggested in the Budget have been formulated keeping in mind the achievable economic growth, creation of employment opportunities and poverty alleviation. The Budget has provided for measures to restructure and reconcile the tax system. At the same time, proper attention has been given to the protection and promotion of domestic industries in the face of liberal trade policies, which could have been realized even in early 1990. The Budget has proposed measures for restructuring the VAT rate, introduced steps for raising more revenue through direct tax, and suggested elimination of existing distortions in the rates of custom duty and rationalizing the same, complete withdrawal of supplementary duty on a large number of goods and abolishing license fee.
As regards mobilization of more revenue, the Budget 2002/03 while rationalizing the tax structure also proposed expansion of the tax base. Some new measures include : increasing personal income-tax limit, including some professional groups within the net of VAT from the next fiscal year, taxing the income of NGOs except that from the operation of micro-credit, and withdrawing the provision of allowing tax holiday for the so-called expansion unit of those 2,000 industries which have been enjoying the benefit of tax holiday.
EXPENDITURE
Revenue expenditure for the fiscal year 2002-2003 has been estimated at Tk.239.72 billions which is 5.6 percent higher than the revised estimate of 2001-02. During 1996-97 through 2001-02, revenue expenditure on average registered an annual growth of 8 percent.
The Annual Development Program (ADP) for 2002-03 proposes an outlay of Tk. 192 billion -- an increase of 20 percent over the revised ADP of 2001-02. Priority has been given to projects aimed at achieving faster economic growth and poverty alleviation. In these priority sectors, quality projects with focus on value for money have been undertaken and enhanced allocations provided. About 55 percent of the ADP resources will be financed from domestic resources and remaining 45 percent will be in the form of external assistance.
Consistent with the election pledge of the Bangladesh Nationalist Party (BNP), the highest priority has been given to the education sector which compared to 2001-02, received a 14.2 percent higher combined-allocation from the revenue and development budgets during 2002-03. From out of ADP allocation, the single largest allocation was for programs supportive of poverty reduction in the education sector. To enhance female education for empowerment of women and their increasing participation in development activities, the Government decided to extend female students’ stipend program from class X to XII and to waive their tuition fees. The Budget 2002-03 as well as ADP 2002-03 provide for necessary allocation in this regard-
The Government is committed to ensuring basic health services particularly for the poor and the distressed and, compared to the preceding year; this sector received higher allocation from both the revenue and development budgets.
Other than social sectors, physical infrastructure, water resources, power, natural gas and, of course, agriculture has also received emphasis in the ADP 2002-03 and the concomitant support from the revenue budget of 2002-03.
BANGLADESH BUDGET AIMS AT SELF-RELIANCE
Bangladesh's government budget seeks to reduce the poor country's dependence on foreign aid and boost economic growth, officials said. Foreign loans and grants will account for only 14 percent of the 450 billion taka ($8-billion) budget for 2002-03, down from the average 40 percent in previous years, Finance Minister Saifur Rahman said as he presented the budget in Parliament. The legislature has to approve the budget before it takes effect.
"It is our cherished goal to attain gradual self-reliance," Mr. Rahman said as he set the economic growth target at 6 percent for the fiscal year beginning July. Growth for the current year ending June 30 is estimated at 4.8 percent.
BUDGET 2002-2003
ABOUT SOME AMENDMENTS PROPOSED IN DIRECT TAXES
On 6 June 2002 the Finance Bill 2002 has been placed before Jatiya Sangsad for its consideration and adoption. Wealth Tax Act was repealed in 1999 by the Awami League government but this was redone in the guise of surcharge. Imposition of surcharge on income can not serve the purpose of wealth tax. A surcharge is a distortion of taxation system. These are usually done in times of war, famine and floods and such other calamities. It is good that the Finance Minister has withdrawn the provision of imposition of surcharge.
Prior to our fight for the liberation of Bangladesh, we would talk of twenty-two families of Pakistan who plundered the wealth of Pakistan, including the Eastern part, now independent Bangladesh. And now in Bangladesh how many families are there in place of twenty-two? Introduced in 1963, the assesses became used to pay this kind of tax at the rate of 1 per cent to 3 per cent of "net wealth" which was defined to mean the aggregate value of all assets as reduced by the aggregate value of all debts owned by the tax-payers on the valuation date. In the Act that is rescinded there were a dozen of exemptions. The law was rational and balanced.
One of the purposes of fiscal laws is to make the rich less rich and the poor less poor so that an exploitation-free egalitarian society is evolved. Instead of lowering the taxable limit from Taka one lakh to 75000 the WT Act could be fruitfully revised which could make up for the probable loss of revenue for retention of the taxable limit to Taka one lakh.
Wealth tax is not really a burden of multiple tax system. It is an ancillary incidence meant for a limited number of people of the society. It is a fiscal tool to narrow down the gap between the rich and the poor. It is an anti-cartel measure. Taken on over-all view of the Bangladesh income-groups one would probably find considerable justification for the revival of Wealth Tax Act.
Tax exemption limit for individuals was raised by Finance Act, 2000 to Taka one lakh from Taka 75000. The Finance Minister has argued that the current exemption limit is undoubtedly high in the context of our per capita income, and the exemption limit prevailing in neighboring countries, and so the reduction of tax exemption limit has been proposed down to Taka 75000. The present four-tier tax structure has been replaced by a five-tier tax structure - up to 75000. Taka. Taka 75000/- to Taka 1,50,000 – 10 per cent, Tk 1,50,00 to 2,50,000 – 15 per cent, Taka 2,50,000 to 500,000 – 20 per cent, above and Taka 500,000 25 per cent,. The minister in his Budget speech has given three examples of income groups of Taka 10 lakhs, 5 lakhs, and 2 lakhs and has shown that because of a five-tier structure tax incidence would be less.
The proposal is indeed very well-argued, but the psychology of the tax-payers is an inescapable reality in revenue administration. Once the people are used to certain benefit, it can hardly be withdrawn without clamor. There is a rider clause in the proposed five-tier tax structure. Having regard to inflationary tendencies, the minimum tax for all individual categories of assesses has been fixed at Taka 2400. Could it not be varied in terms of categories? And, then, why should the minimum tax is fixed? The main spirit of assessment to tax under the Ordinance 1984 is that the Deputy Commissioner of taxes "shall assess the total income of the assesses and determine the sum payable by him..."The quantum of tax should be left to the computation of total income and the tax rate applicable thereupon. A premeditated fixation of sum payable cuts across the tax rates prescribed. It is a distortion.
The NGOs have been playing a vital role in the uplift of our rural population. It has been proposed to bring all sources of their incomes under taxation except that arising from micro-credit operation. The NGO activities should be viewed from two standpoints – commercial benefit and social welfare. Income earned discernibly and entirely for social welfare should be declared exempt, and the one earned for individual benefit, or for utilizations of the entrepreneurs, should be subjected to taxation.
In the case of misuse of authority by the Deputy Commissioner of Taxes (DCT) under his best judgment assessment, or, in the case of failure to give due refund to an assessed, the DCT’s inaction or wrong action is proposed to be treated as punishable misconduct. The DCTs are pivots of tax administration. There should be a scope for their hearing before they are charged of misconduct. Misconduct is indeed a punishable offence on the part of a government servant. The DCTs are public servants as much as their counterparts in other service cadres are. In case of their dereliction of duties, they, along with others, can be taken care of under Govt. Servants (Discipline and Appeal) rules 1985 and 1979. The DCTs as revenue officers under Income Tax Ordinance 1984 are performing quasi-judicial functions. Their orders are appeal able, even up to the Appellate Division of the Supreme Court of Bangladesh. The task of tax collection is a difficult and unpleasant job. If they are ipso facto taken to be condemnable, they may lose their moral power to act boldly in the interest of revenue.
Responsibility and power should go hand-in-hand that is why they have been offered some protection under Section 182 of ITO 84 barring suits and prosecution against their official duties. Normally, the DCTs, discharge of duties are taken to be for "anything in good faith done or intended to be done under this Ordinance." This is a time-tested practice since 1922.
If income is enhanced above 31 per cent, the DCT, under the Budget Proposal, is required to obtain prior approval of the NBR. The DCT works under an Inspecting Addl. Commissioner as his first boss, and under the Commission of Taxes as his second boss. In the NBR hierarchy Second Secretaries are of the rank of the DCTs, and First Secretaries are of the rank of Addle Commissioners of Taxes. Thus, in effect, under the proposal, the DCT would send the file for initial vetting to his colleague or to his Inspecting Additional Commissioner (IAC). NBR is to be maintained as basically a policy-making body. It should supervise. It should not co-act; that would corrode its power of supervision, and would distort its power of inspection. To accord approval to an assessment order of certain type is to be retained as a field duty. The field officers – the DCTs, the Addl. Commissioners, the Commissioners are all accountable to the NBR. In reality, the NBR approval may not work out satisfactorily, files from outlying areas of Dhaka, Khulna, Chittagong, Sylhet and Barisal zones would have to be sent to Dhaka in season and out of season for approval.
This would be hazardous and time-consuming. In order to avoid sending files to NBR in Dhaka, the DCTs might be tempted to keep the increase of 30 per cent down to, say, 29 per cent of increase wherein the facts of the case might suggest an increase of say, 50 per cent. Therefore it is believed the power of approval of 30 per cent and above cases’ should be given to the Commissioners of Taxes of the concerned zone who bears the burden of budget responsibility. This will make the system practically operable, and revenue leakage due to probable willful suppression of percentage will be safeguarded to a large extent. The NBR should periodically inspect the offices of the DCT/IAC/CT to ensure that no wrong-doing has taken place.
The Commissioner may be asked to send monthly returns to NBR in the matter of such cases. If the practice of approval of draft assessment orders by IAC is rolled back, orthodox inspection of circles by the IAC and/or CT must be strengthened. The DCTs nowadays are given charges of circles, especially company circles, without sufficient assessment experience. They do need constant guidance, assistance and supervision of their immediate controlling officers– the IACs or IJCs. If the approval system is discarded, in special cases, the need for approval may be retained as a check against possible loss of revenue. What is needed is the constant inspection by the authorities above. Every Circle of a DCT should be thoroughly inspected every year by the IAC, and the CT should inspect the IAC’s office every year; Member, NBR, in his term, should inspect the office of the Commissioner of Taxes. If need be, a post of Director of Inspection (Taxes) in the NBR may be enacted to oversee the process of inspection.
A proposal to withdraw departmental appeal to the Taxes Appellate Tribunal has been made. It has been argued that the Department files second appeals against its own officers. In the Department of Taxes first appeals are filed by the assesses against "bad" orders of the DCTs and these are heard by Commissioner (appeals) in the matter of companies, and by AACT/AJCT in respect of non-company cases. If the Commissioner feels that these authorities have given undue relief causing loss of revenue, he can, under the existing system, contest that order in second appeal before the TAT in a bid to retrieve the lost revenue.
The tribunal traditionally has been an independent body; at one time this was under Ministry of Law to ensure neutrality of justice. In TAT there is an Addle Commissioner of Taxes who acts as the departmental representative. Without him no hearing takes place. One of the reasons for the proposal to withdraw departmental appeal is that in most cases these appeals are lost. The question is: If the zonal commissioner of taxes, who is saddled with the budget responsibility, finds that there has been loss of revenue in a particular case, what measure, in the absence of power to file the second appeal, he can take to retrieve the lost revenue? It the opportunity to file second appeal has been abused; the power to file the said appeal may be made restrictive with conditional ties. At present, the third appeal, that is appeal to High Court Division, cannot be filed by the department without permission of the NBR.
Similarly, the second appeal may be restrictive to ensure that only proper cases are chosen for second appeals. If the appeals are withdrawn wholesale, there may not be adequate work load to justify four new Benches of the Appellate tribunal.
A devout nationalist, Mr. M. Saifur Rahman, is the most experienced Finance Minister, in South Asia. The measures he has taken for our industrial growth and betterment of the overall economy speaks of his sagacity and love for the country. The Budget 2002-2003 is indeed the testament of self-reliance and nationalism.
NEW BUDGET SILENT ON VITAL ISSUES
The budget for fiscal year 2001-2002, the last in the series of budgets presented by the Finance Minister last Thursday in parliament, is a classic one in balancing the interests of various interest groups. It has not made any radical departure understandably because this is the election year and the ruling party in its desire to get reelected would not want to produce an impression of further taxing or creating burdens on people. Thus, the coming year's budget has not proposed new taxes or raised rates. Rather, it has cleverly sought to give the impression that the aim is to ease such burden by declaring higher ceiling of exemption from income tax. It has proposed duty decreases and increases for import of raw materials of some local industries and finished products respectively that could benefit certain local industries.
However, these measures do not quite hide the fact that in the coming year, the common man will continue to suffer from escalation of prices and charges as the net of the value added tax (VAT) will widen to include more commodities and services. Besides, the government has already increased the charges of utilities such as electricity and gas months before the present budget and also increased fuel prices. The same has already had an impact on raising costs of living notwithstanding claims to the contrary that inflation in Bangladesh has fallen last year and remains at only 1.58 per cent in the current year. Budgetary statements notwithstanding, the way would be open for the ruling party, if it is elected, to go for another round of arbitrary rising of administered prices through statutory revenue orders (SROs) to meet its ambitious revenue targets.
Thus, the budget has no special feature really apart from the rather unusual preface to the budget speech by the finance minister in which he tried hard to make a case of success of the economic policies followed by his government during the last five years. There are considerable truths too in these claims but the same are hardly excuses for not addressing through the budget the formidable macro economic problems that have been building up.
For instance, the budget contains no measure that could be identified as proposed to cushion the sagging foreign currency reserve. It hardly addressed the issue of the government's continuing massive borrowing from the banking system that is bale owning the size of the public debt with the risk that such unchecked borrowing would mean spending of greater amounts of revenues collected for only servicing this debt in the future. The borrowings also have inflationary potential. This year's budget should have provisioned a good amount of money-as was done last year to create a special fund for IT entrepreneurship-for the establishment of backward linkage industries for the garment industry. This is a very pressing necessity for this pivotal industry to face the challenge of the post-2005 period. But this issue was not even mentioned by the finance minister in his budget speech. The budget was also silent in respect of measures to revive the country's capital market.
In sum, the budget for the next fiscal year represents a patchwork balancing act with none of the decisive measures needed to treat the underlying structural ailments of the economy.
THOUGHT ON NATIONAL BUDGET FOR THE 2000-2001
Finance Minister Kibria will place the national budget, the last by the present Awami League Government, for the fiscal year 2000-2001 on Thursday. Any conjecture about the contents of the budget documents in any pre-election year is bound to be fallible. The budget will be tailor made to suit the interest of the ruling party. There is nothing wrong with it. This has been the practice in all developing nations.
The budget documents for the coming fiscal year, one can say it for sure, will be full of bloated figures and fancy projections, which will never be reached nor there will be any serious attempt at attaining them. There is one grave danger inherent in presenting a rosy picture about the state of the national economy. There are already speculations about Bangladesh losing the status of the developing nations. This, in itself, is a heartening prospect, to erase the stinking stigma of being called a developing nation, but this can be very upsetting for the policy planners and economic managers of the country. There will be a slow down in the flow of foreign assistance.
The finance ministry must have kept three things in mind in preparing the national budget. The shortfall in revenue earrings to the extent of Tk. 2500 crore, massive government borrowings from the banking system in the current fiscal year and the needs of the ruling party to meet its political goals in an election year.
One "redeeming feature” of the national budget presented by the awami league government during the past five years has been the upward revision in the projections of the revenue earnings from domestic sources. This has never come true; the earnings have always been short of the target by a yawning margin. This has never daunted the finance ministry; the target for the coming fiscal year will be higher than the figure projected in this year's document. The current year's earnings trail behind by over Tk.2500 crore. There is no sign in the economy yet to suggest that the income from the domestic resources would jump to the level anticipated by the government even surpassing the income of 2000-2001. The possibility of revenue earning target going haywire has not been ruled out in the coming year as well. Government will continue to borrow ‘debt trap’ fear not withstanding.
Finance Minister Kibria will place the national budget, the last by the present Awami League Government, for the fiscal year 2000-2001 on Thursday. Any conjecture about the contents of the budget documents in any pre-election year is bound to be fallible. The budget will be tailor made to suit the interest of the ruling party. There is nothing wrong with it. This has been the practice in all developing nations.
The budget documents for the coming fiscal year, one can say it for sure, will be full of bloated figures and fancy projections, which will never be reached nor there will be any serious attempt at attaining them. There is one grave danger inherent in presenting a rosy picture about the state of the national economy. There are already speculations about Bangladesh losing the status of the developing nations. This, in itself, is a heartening prospect, to erase the stinking stigma of being called a developing nation, but this can be very upsetting for the policy planners and economic managers of the country. There will be a slow down in the flow of foreign assistance.
The finance ministry must have kept three things in mind in preparing the national budget. The shortfall in revenue earrings to the extent of Tk. 2500 crore, massive government borrowings from the banking system in the current fiscal year and the needs of the ruling party to meet its political goals in an election year.
One "redeeming feature” of the national budget presented by the awami league government during the past five years has been the upward revision in the projections of the revenue earnings from domestic sources. This has never come true; the earnings have always been short of the target by a yawning margin. This has never daunted the finance ministry; the target for the coming fiscal year will be higher than the figure projected in this year's document. The current year's earnings trail behind by over Tk.2500 crore. There is no sign in the economy yet to suggest that the income from the domestic resources would jump to the level anticipated by the government even surpassing the income of 2000-2001. The possibility of revenue earning target going haywire has not been ruled out in the coming year as well. Government will continue to borrow ‘debt trap’ fear not withstanding.
A number of factors have stunned the economic growth. Frequent disruption of works at the Chittagong port, the lifeline of the economy of Bangladesh, power outage, growing influence of the muscle power in business and trade.
Deteriorating law and order, bank’s reluctance to assist business, unbridled growth of corruption and lack of transparency and accountability in government purchases have combined to stall the forward progress of the economy.
The government's claim that the GDP will grow by 6.23 per cent this year has been contested by many. The only silver lining in an otherwise gloom scenario is the bumper paddy crops for the past three years. This has kept the economy stable while other sectors have tumbled.
The law and order has been a matter of grave concern to all. Close kins of ruling party leaders grabbing business, killing businessmen, forcibly occupying government lands, breaking into flats and apartments of others and doing all kinds of wrongs with administration just playing the role of a mute witness have rattled all. Government silence and its reluctance to be severe and ruthless with those breaking the laws have stupefied many.
It is no wonder then, Prof. Muzaffar Ahmed, a highly thought of person and whose views are heard with respect, was prompted to write "I am certain that none in this country would question the fact that the right to normal life and guarantee for natural death has become more and more uncertain in Bangladesh"
Business community's complaint -- that cost of doing business because of increased crime and collusion of law enforcers has so increased that a normal mark-up on their goods and services provide them with a low rate of return of seed capital, is a sad commentary on the state of law and order and its impact on the economy.
Deteriorating law and order, bank’s reluctance to assist business, unbridled growth of corruption and lack of transparency and accountability in government purchases have combined to stall the forward progress of the economy.
The government's claim that the GDP will grow by 6.23 per cent this year has been contested by many. The only silver lining in an otherwise gloom scenario is the bumper paddy crops for the past three years. This has kept the economy stable while other sectors have tumbled.
The law and order has been a matter of grave concern to all. Close kins of ruling party leaders grabbing business, killing businessmen, forcibly occupying government lands, breaking into flats and apartments of others and doing all kinds of wrongs with administration just playing the role of a mute witness have rattled all. Government silence and its reluctance to be severe and ruthless with those breaking the laws have stupefied many.
It is no wonder then, Prof. Muzaffar Ahmed, a highly thought of person and whose views are heard with respect, was prompted to write "I am certain that none in this country would question the fact that the right to normal life and guarantee for natural death has become more and more uncertain in Bangladesh"
Business community's complaint -- that cost of doing business because of increased crime and collusion of law enforcers has so increased that a normal mark-up on their goods and services provide them with a low rate of return of seed capital, is a sad commentary on the state of law and order and its impact on the economy.
Changing the inspector-general of police will not help improve the situation unless there is a dramatic change of heart in the government leaders. They must not think that others properties are their properties and must learn to know that the law should be applied fairly and squarely for all. If you allow the killer son of an MP to get away with his crime, police obviously will not act as it should. It will take its price. The price is collusion with the crime
world to earn money.
It has never occurred before that law and order could be a great factor in destabilizing the economy. It is a fact, but it has never been so before.
It has never occurred before that law and order could be a great factor in destabilizing the economy. It is a fact, but it has never been so before.
EXPORT:
We know that Export plays a key role in economics because if export increase than foreign reserve will increase, employment opportunity will be increase. So increasing export is important for any country. But in point of view of Bangladesh economy, export is decreasing day by day, that means export product’s production is less.
In the year of 2002, revenue from export decrease by 7.4% than 2001.
FOREIGN INVESTMENT:
In the year of 2001-2002, foreign investment decrease by 61% than previous year. According to Center for Policy Dialog [CPD] data in total 114.71 million dollar was invested in Bangladesh.
In present fiscal year [first 2 months] $7 million is invested which is 30% less than previous year.
IMPORT:
Present government imposed High Duty and Tax on some item to reduce export. In some sector, government increase 100% LC Margin. As a result prices go up and import is in decreasing trend.
In previous year, import was decreased by 8.5% but in present fiscal year [first 3 months] import has decreased by 5.6%.
IMPORT AT A GLANCE:
- Import of capital equipment decreased 19.1%.
- Import of intermediate goods decreased 8.8%.
- Consumer product increased 118.2%.
- Foods import increased 258.50%.
IDEAL MONEY:
According to recent newspaper data, 7500 crore taka are keep as ideal money in Bank.
INFLATION:
According to Bangladesh Bank data in 2002, inflation was 2.35% and in 2001 it was 1.57%.
FOREIGN AID COMMITMENT:
In previous fiscal year, foreign commitment has decreased 57.2% and disbursement decreased 8.7%. As a result foreign country does not want to give aid. According to CPD report in 2002-2003 there is no foreign donors have committed to give Aid commitment.
LIVING EXPENSES:
In previous year 2001-2002 living expenses has increased 8.5%. But living expenses of the year 2000-2001 it was 5.4%.
The reason of increasing living expenses is increasing price of agriculture products. Actually Electricity, Gas, Water and others price increased 30%.
GROWTH RATE OF ECONOMY:
In 2001 growth rate of Bangladesh economy was 5.3%. In following pie chart –
But in this year [2002] growth rate was 4.8% which is less than previous year.
UNEMPLOYMENT:
Among 13 crore people 3 crore people are unemployed in our country. Unemployment problem become one o main problem or threat for Bangladesh economy. Bangladesh has recourses (labor) but could not able to use them because of lacking technology.
Recent data of Finance Minister in Bangladesh, labor power has increased 1.7%. But government is failing to give them opportunity to work.
In Bangladesh 60% of labor forces worked in agriculture sector.
RE-PRODUCTION OF THE BUDGET 2002-2003:
After analyze the budget and economy of Bangladesh we find that it is impossible for a nation to survive in the modern competitive world without economic reforms.
To make effect budget for a country need more research and sufficient data and time. So in a short time it is totally impossible to produce a new Budget, so we focus on those sectors that can boost Bangladesh economy, like-
· IT sector
· Energy and power sector
· Agriculture
· Garments sector
· Foreign investment increase
· Reduce budget on public administrator
· Reduce of MINISTER(Bangladesh is a poor country, so we don’t need too many )
· Reduce budget on Defense
Our budget has proposed measures for restricting vat rate, introduced steps for raising more revenue through tax, easy FDI procedure (visa procedure), raising domestic investment, developing IT.
We want to allocate or proposed on
- Education- 12.2%
- Transport and communication- 13%
- Energy and power- 14.2%
- Health- 7%
- Local Government Rural development-9%
- Agriculture- 13%
We have to create proper environment for Investment that mean we have to strict law.
Here we have revised the budget of Government and made necessary changes from our point of view.
SUMMARY OF BUDGET ESTIMATES (Taka in Crore) | ||||
Statement No. Description | Revised by student 2002-2003 | Budget 2002-2003 | Revised 2001-2002 | Budget 2001-2002 |
RECEIPTS ½ Consolidated Fund Receipts Revenue Grants Lending & Advance Repayments Domestic Loans Foreign Loans Transaction with IMF | 33,150 3,342 1.010 6,850 6,200 325 | 32,850 3,042 1,002 6,814 6,139 315 | 27,876 3,481 927 6,164 5,313 300 | 28,096 3,663 926 7,539 6,559 240 |
50,877 | 50,162 | 43,861 | 47,023 | |
T & T Bond Borrowing From Banking System | 250 1500 | 200 1,358 | 171 1,682 | 200 2,158 |
Total- Consolidated Fund Receipts: | 52,627 | 51,720 | 45714 | 49,381 |
3 Public Accounts of The Republic – Receipts Public Account | 14,755 | 13,445 | 13,574 | 12,180 |
Total-Public Accounts of The Republic –Receipts: | 14,755 | 13,445 | 13,574 | 12,180 |
TATAL RECEIPTS: | 67,382 | 65,165 | 59,388 | 61,561` |
EXPENTURE Consolidated Fund –Expenditure 4/6/7 Non –Development 5/8 Development | 37,570 20,053 | 35,857 19,663 | 32,931 16,583 | 34,311 19,372 |
Total- Consolidated Fund –Expenditure: | 57,623 | 55,520 | 49,514 | 53,683 |
9 Public Accounts of The Republic –Payment Public Account | 9,759 | 9,645 | 9,874 | 7,878 |
Total-Public Accounts of The Republic –Payment: | 9,759 | 9,645 | 9,874 | 7,878 |
TOTAL EXPENDITURE | 67,382 | 65,165 | 59,388 | 61,561 |
RECOMMENDATION
There is a contradictory view over the million of people, some are saying it the most revised and significant budget since it was prepared but some are saying it could not meet the national benefits. Over viewing the whole budget it can be concluded that it will be the beyond of our reach to make a budget reproduction but we focus on some important sector that can boost our Economy and prepare a revised Budget. We tried our level best to make it a worthy one but it needs a lot of sole consideration to make it a realistic one.