Budget aims high
The finance minister has presented the 44th annual budget of a record size in parliament. We are giving our preliminary reactions to it at this stage; deeper analysis will follow. Standing at Tk 2.5 trillion, this year's budget places greater emphasis on human resources development. Proposed allocation for the education sector is Tk 316.18 billion.
However, the rate of implementation of the annual development plan (ADP) remains a major concern. Its rate of utilisation stood at slightly over 50 percent in the first 10 months of the last fiscal. While a 7 percent growth rate is envisaged, economists and experts alike have pointed out that without institutional and policy reforms, attaining growth rates at such a high notch may not be feasible.
There is a renewal of pledges to complete mega projects such as the Padma Bridge and metro rail; the emphasis on infrastructure development is welcome.
On the positive side, tax exemption threshold for women and senior citizens above 65 years has been raised from Tk 2,75,000 to Tk 300,000 while for physically challenged people, exemption has been raised from Tk 350,000 to Tk 375,000. The new pay scale for public servants remains an area of concern, and although government employees are set to be included in the tax bracket, it is not clear where from the additional Tk 16,000 crore will be generated. Indeed this year the revenue target has been revised upwards by Tk 500 billion. The increased revenue will have to come from a widened tax net, value added tax and tax at source. It can be challenging.
At the end of the day, the government needs to get its act together in terms of implementation; otherwise the bulk of allocations will remain unutilised and the quality of spending may be compromised.