A national budget, as a layman understands it, is a financial estimation about a government’s earnings and expenditure over a year which also takes into account the trends and projections about the market, taxation and specific economic goals. In the context of countries like ours, the budget is also expected to address issues of equity and social justice, unemployment, poverty reduction and redistribution of income along with achieving fiscal discipline.
A layman may or may not know the etymology of the word “budget” which comes from the Old French word bougette, meaning “little bag”, equivalent to the briefcase our finance minister carries into the parliament out of which the budget comes—but surely feels the pinch as his shopping bag becomes smaller and smaller every year. This explains why, before the budget is presented in the parliament in the month of June, low- and middle-income families begin to worry about price hikes of essential goods. And in keeping with this genuine worry, our media focuses primarily on the goods and services that would be costlier or slightly cheaper, as if the whole business of the budget boils down to setting the price of consumer goods. The other overriding concern appears to be the sector-wise budget allocations, particularly in education, health and agriculture, and a comparison with allocations in previous years. Some other sectors, such as communication, public administration and public order, receive some attention (the notable exception being defence, about which there is hardly any discussion anywhere) but only marginally and as a matter of routine.
It is encouraging to see education taking the centre stage in public and media discussion because without ensuring global competence for our students, we cannot expect them to survive in the fiercely competitive world of education and work.
This year’s (FY2019-20) budget, which was presented in the parliament about a couple of weeks ago, is the biggest—but not necessarily the most ambitious—so far, and has been described by the government and ruling party functionaries as “pro-people”. Top trade bodies also find it growth-enhancing and investment-friendly. The budget indeed has made more money available to the government’s mega projects and development schemes. But the statistics that embellish the financial plan overshadow the core values that go into the making of budget philosophy. The term “philosophy” may appear to be at odds with the hardnosed preoccupation a budget requires, but no one can deny the importance of the budget reflecting the values a nation and its culture cherish. Thus integrity, accountability, transparency and diversity are integral to budget philosophy, along with a commitment to excellence, quality and creative solutions.
This year’s budget has been seen by civil society organisations and economic and policy think tanks as friendly towards the rich and the unprincipled while being harsh to low- and middle-income people. How can one, for example, justify the provision of turning black money white? Why should taxes on national savings instruments—whose interest provides some relief to a large number of low- and middle-income families—be doubled? Who can explain the leniency shown to loan defaulters?
A friend of mine, also an economist, told me that the budget indeed has a philosophy, a Keynesian one, where deficits are desirable, permanent deficits more so. But the budget appears to ignore many promises that were made in the Awami League’s election manifesto before the last general election. Didn’t the manifesto declare, in no uncertain terms, that no black money would be allowed to be whitened? The minimum tax ceiling hasn’t been raised in this year’s budget despite prices of essential commodities increasing more than 10 percent over the year. This also goes against the spirit of the manifesto which proposed widening the tax net without hurting the lower tax bracket people. Bangladesh fares poorly (worst in South Asia) in terms of the tax/GDP ratio as many affluent tax dodgers still remain outside the tax regime.
Budget philosophy may have given way to the politics of budgeting, which helps make various pressure groups happy. But the philosophy, which also outlines sector-wise vision and action, should have been pursued, if not in its entirety, at least in key investment areas. Education, health and social welfare (collectively put under the rubric of “human resource development”) are some of the areas where budget allocation should not be considered purely in financial terms, but as a form of social investment which brings manifold returns, both tangible and intangible, in the long run.
Our expenditures in health and education (as a percentage of GDP) are the lowest in South Asia, demonstrated in Unesco Institute for Statistics’ comparative picture of recent (2017-8) budget provisions in education in South Asia (as a percentage of GDP): Afghanistan at 3.9 percent; Bangladesh at 2.1; Bhutan at 7.1; India at 3.8; Maldives at 4.3; and Pakistan at 2.8. It is true that in monetary terms, the size of this year’s education budget is bigger than last year’s, but considered as a percentage of GDP, the allocation seems to have remained the same as last year’s. One puzzling aspect of this year’s education budget is the inclusion of technology in the line item. While some aspects of technology such as digital resources used by educational institutions may be part of the education budget, what about the money set aside for the Rooppur Nuclear Power Plant project?
The Centre for Policy Dialogue in its assessment of the FY2019-20 budget has shown how government expenditure on education has declined from 12 percent of the national budget in FY2009 to 11.7 percent in FY2020. The government’s own 7th Five Year Plan envisaged spending 2.8 percent of GDP in education by the end of the plan period while Unesco proposes the figure to be six percent which is globally accepted as a desirable benchmark. The below-par allocation to education is further pruned by the 80-85 percent budget implementation, poor budget management and corruption.
In countries like ours, budgetary provision for human resource development needs to follow an equalisation model which stipulates that the poor are provided more so that the opportunity gap between them and the privileged class is narrowed each year through incremental investments in areas that are vital for improving quality of life. This year’s budget does promise some action on this front but if the actions are not supported by necessary funding, the gap will, in fact, widen. Human resource development would have seen a great deal of quality improvement if the budget operated from a philosophical base in addition to a fiscal one. In education, for example, this would have, among others, led to: (i) implementation of important government education documents such as the National Education Policy 2010; (ii) quality intake of teachers and their continuous improvement through training; (iii) raises in teachers’ salary, especially at the primary and secondary levels; (iv) quality enhancement in teaching, learning and research; (v) region-wise allocation ensuring equal opportunities to students from hard-to-reach regions; (vi) inclusivity of marginalised communities; (vii) better schools, better curricula, quality textbooks; and (viii) an end to coaching centre and rote-learning-based, certificate-oriented education.
Education should not be a mere line item in a budget; rather it should be the most important area of collective, national investment. Sustained and incremental investment in education alone can ensure the nation’s competitiveness at a time when the Fourth Industrial Revolution is upon us, whose growth will be exponential and which will demand cutting-edge technologies for excelling in every sphere of human activity—from agriculture to construction to aviation. Education alone can provide us the required level of competence to reap the benefits of the revolution, which, experts say, has already begun. But along with providing the highest level of knowledge and skills, education should also be inclusive, universal and humane. These ideals cannot be realised in a piecemeal fashion: only a holistic approach may ensure their translation into action. If these are embedded in every document of the state, such as the yearly budget, and work plans are prepared and implemented accordingly, the results will be nothing but spectacular.
Syed Manzoorul Islam, a retired professor of Dhaka University, currently teaches at ULAB and is a member of the board of trustees of Transparency International Bangladesh.
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