The challenges before him were basically two-fold. The rising essential prices and the increasing inflation rate have been hitting the vast majority of the poor people of the country so that there was a crying need to provide them with relief. Secondly, the confidence of the traders and investors which had been admittedly shaken by the anti-corruption drive, the eviction of hawkers in urban areas and the disruption of the rural market structure in the name of reclaiming government lands needed to be restored through a package of incentives.

Coming to the price situation, duties on import of some essential items like edible oil, lentil and rice have been done away with but imported sugar would cost more. Computer, computer goods, medical treatment fee, et al will be dearer. On the one hand IT has been declared as thrust sector but on the other computer, SIM and telecommunications materials are to cost more. It augurs well for newspaper industry that the newsprint price will be lower.

To provide relief to the poor, social safety net has been extended with VDF coverage for 50 lakh people for eight months. Overall, 10.6% of the budget will be spent on social safety provisions. It is good to see food security receives priority attention of the government. Subsidisation of agricultural inputs has been increased which is likely to have positive effect on agricultural production.

In allocations of resources disparity between regions is being sought to be removed.

Export subsidy has been retained contrary to speculations otherwise and as a matter of fact in view of the arrears in the sector, the subsidy provision has been increased to Tk 1100crore from the previous Tk 300crore. As for the fiscal measures, the taxation on imported raw materials and capital machinery so far as the textiles go needs to be reconsidered on two counts. First, to help retain the competitive edge of the RMG sector and secondly to promote local textiles which cater to the needs of the ordinary people.

The proposal for endowment fund worth Tk 350crore for agriculture is to be lauded but that for education research need to be substantially increased. Tk 150crore lending fund for agro-based industry and Tk 100crore endowment fund for SMEs development are good proposals.

The overall size of the budget is Tk 79,614crore of which the revenue budget is Tk 52,900crore and the ADP is Tk 26,500crore. The deficit is 5.6 percent of the GDP including the subsidisation liabilities to the Bangladesh Petroleum Corporation. So, internal resource mobilisation assumes critical importance, even though the share of external resources in the development budget is estimated to be higher implying increase in debt servicing. Revenue collection has to be substantially revamped to reduce government borrowing from the banking sector which is pivotal to inflation-reducing monetary policy.