In his reaction to the proposed budget for 2007-08 fiscal year, Centre for Policy Dialogue Executive Director Debapriya said withdrawal of infrastructure development surcharge and changes in duty structures will help bring transparency in the taxation system.

He however termed the impact of the tax system restructuring a "matter of research".

He said the government has undertaken three steps to keep the prices of essentials under control--liberalising import, facilitating import by small importers, increasing mid-term agriculture production and import.

On increasing allowance for the Vulnerable Group Feeding (VGF) cards from Tk 200 to Tk 220, he said, "By increasing Tk 20 against each card the government has admitted that it is required to increase allowance."

The government perhaps could not allocate more for the hardcore poor group due to its resource constraint, he said. "But it should allocate more for the VGF by bringing money from other sectors as the poor people in the rural areas are suffering due to the price hike," he added.

On measures taken to decrease income disparity between the rich and the poor, he said it is not possible to reduce the income gap in one budget.

Debapriya called on the government to work hard to implement the budget and ensure transparency in collecting the budgetary money.

ZAID BAKHT
Dr Zaid Bakht, research director of Bangladesh Institute of Development Studies, said despite significant safeguard measures to protect common people from growing inflation, implementation of such a big budget by only 10 advisers will become a challenge for the government.

He welcomed the proposed subsidy for diesel and importing significant amount of rice and food items for the VGF programme and tax exemption on some essential commodities.

He said as a whole the budget size has increased over 18 percent excluding the allocation for the liabilities of Bangladesh Petroleum Corporation.

Although budgets have usually increased on an average by 10 percent every year, in most cases those budgets could not be implemented properly, he said.

Bakht termed the proposed revenue target (16.8 percent) "ambitious".

The proposed increase in import duty slabs on raw materials from 5 percent to 10 percent and for intermediate goods from 12 percent to 15 percent may hamper domestic industries, he said.

ZAHID HUSSAIN
The deficit in the proposed budget for 2007-08 fiscal year appears slightly higher but at the same time it is modest in terms of regional and international context, said Zahid Hussain, an economist of the World Bank (WB).

There is nothing to be worried about domestic financing in meeting the deficit of the proposed budget, he told The Daily Star giving his reaction on personal capacity, not as a WB staff.

Proposed allocations for power sector, education, and social safety net have also positive signs, he added.

The proposed budget for 2007-08 has a growth orientation although the expenditure target is big in terms of size.

With the stipend provision for secondary school girls set earlier, the proposed budget also brings innovative ideas to provide the same facilities to boys, he said.

The projected target for revenue earnings is also closer to reality, he added.

He, however, said there are some challenges in implementing the budget and the proposed measures to prevent inflation are not clear.

IBRAHIM KHALED
Former Bangladesh Bank deputy governor Khondokar Ibrahim Khaled described the proposed budget as "transparent" and "made in line with the previous tradition".

He said the block allocation in the budget has been narrowed and project selection is also transparent.

"The increased allocation for BPC [Bangladesh Petroleum Corporation] leads to higher deficit in the budget. But the higher allocation is the reflection of transparency," he said in an instant reaction to the proposed budget.

The government may face challenge in future in meeting up the higher deficit, he added.