The 46th annual budget of Tk 4 trillion has been placed in the House by the finance minister and this is our preliminary reaction to it. This budget is the largest in history, which is 26 percent higher than the one in the preceding fiscal. It is also a budget with the biggest deficit. The total size of ADP has been set at Tk 1,64,085 crore and the revenue target has been set at Tk 2,87,991 crore leaving a deficit of Tk 1,12,275 crore.

We welcome the enhanced allocation in the major areas including education, the power sector and mega infrastructure projects. However, experiences shows that poor planning and lack of proper implementation have impeded the fulfilment of the projects. Allocation for education has gone up by 14 percent to Tk 45,163 crore with emphasis on heavy infrastructure investment with the aim to improve both capacity and quality. The emphasis on qualitative improvement in teaching methods is noticeable.  

However, we have reservations on the new uniform VAT to be charged at 15 percent since that will adversely affect the consumers in general. The increase in excise duty on bank deposit holders who already pay advance income tax is another sticky issue. 

Obviously, the budget has an eye on the elections of 2019. And hence, there may well be an emphasis on spending to complete projects ahead of it. Our question is whether the massive spending will result in qualitative spending that will benefit the electorate, or the spending is merely to elicit votes.