Stick to basics
Razin Rahman, a school teacher, returned home yesterday full of despair. He could not figure out how to cover his family expenditure. His hopes of the newest budget easing some of his burden also disappeared quickly. It now seems that his sufferings have instead increased even more.
Razin was planning to build a house in his ancestral home but as the prices of construction materials go up, his dream house, where he would live out his retirement, seems no longer possible. This is a tale many can relate to after the new budget was revealed.
Finance Minister AMA Muhith's measures will affect real estate construction which would make homeownership a far off dream for many if not something impossible. Of course's Razin's aspirations aren't the only one the latest budget has shattered.
Beginning his day with the news of a gas price hike, Shafik Ahmed hoped to find some solace when the finance minister was reading out the budget for the fiscal 2017-18. But this was not to be.
“Within six months the gas price has increased twice. I hoped the government would consider our predicament and lower prices of essentials to give us some room to breathe,” he said, expressing his frustration.
It seems that this budget has failed to take into consideration the growing middle-class of Bangladesh. According to a 2015 BIDS report, the current middle class stands at 20% of the population and is expected to grow to around 25% by 2025. While that may be a significant number, the current budget leaves the middle class barely clinging onto to its current status with no hopes of climbing the ladder any further.
Adding to their problems, any savers will be charged even more from next year for saving their money in the banks.
The finance minister proposed imposing Tk 800 Excise Duty instead of existing Tk 500 in cases where the balance, whether debit or credit limit, is between Tk 1 Lakh and Tk 10 Lakh.
“It seems the government wants to eat up our hard-earned savings,” said Md Rafikuzzaman, a banker by profession.
“Yes, it will help the government to earn some extra revenue but we will not get any extra benefit from the state. So, why should depositors have to pay such amounts?” he asked.
He had hoped that the tax-exempted income-threshold for individual tax payers would be widened but it remained the same at Tk 2.50 lakh.
To escape the grasp of such fiscally-borne frustrations, family outings have proven to be good diversion. The new budget, though, has not left even that unscathed.
In the last decade, the country saw a boom in the restaurant industry as many food shops opened during the period and food lovers thronged these places mostly on the weekends. Now the new budget means imported ingredients, such as pasta, would become more expensive, making eating out a more costly endeavour.
Shahnaz Begum, who used to go for dinner once a month, is not happy with the new proposal. “There are few places you'll find for a family to spend time together. But to meet increasing costs, now we'll have to refrain from our outings,” she said.
If Shahnaz thought that she could substitute restaurants for home cooked meals, even that may not solve her problems. Bengali cuisine is famous for its spicy flavours but from July many families may have to bring changes in their recipe as the price of pepper, cinnamon, cardamoms and cumin seeds are also going to rise, along with the price of gas. Thus, cooking at home would also become pricier.
For families like Shahnaz's, a bigger blow may be the increased cost of attaining education, another basic right. Under the new budget, even a decent English medium education will also become expensive.
Moshiur Rahman, who just heard the finance minister has proposed a 15 percent vat for the English medium school, can now only see a gloomy future.
Since last January, he was thinking of transferring his son from an English medium school to a Bangla medium one due to high expenses. “Now I think it has left me with no choice but to switch the medium,” he said.
Under the new budget, even technology, a key to driving growth, has not been spared. Smartphones, which made people's lives a lot easier, will now see an imposition of extra duty on its import to encourage the local industry. The initiative, many customers believe, will ultimately burn a hole in their pockets.
Finally, where there should be a silver lining, none could be found. While the government proposed vat exemptions for some products, there was no impact. Finance Minister AMA Muhith said as a result of these exemptions, the market price of the daily necessary commodities would be expected to go down and not supposed increase under any circumstances.
But people got little benefit from the exemptions due to lack of a proper monitoring system.
This year the prices of rice and other grocery items have shot up, and so have other expenses including house rent, rickshaw fares, children's tuition fees, prices of books, paper, and a range of other goods and services.
The price of sugar can be used to sum up the failure of keeping prices in check. While the government said that there would be no price hike in Ramadan, cost of most of the daily essentials including oil and sugar shot up ahead of Ramadan. The price of sugar is still seen to be high at different markets in the capital.
Dr. Zaid Bakht, chairman of Agrani Bank, said, “There is no overall good news for the middle class people though the vat exemption area was widened. If the tax-exempted income-threshold for individual tax payers was increased, middle class people would get some relief. ”
Yesterday, many people could be found watching the budget session on the television to find some relief. Having found none, they would switch back to the Bangladesh team's cricket match. In 2017, perhaps in distractions is where the Bangladeshi middle-class can find some semblance of solace. Although, Bangladesh's eventual loss meant there would be one less thing to cheer for.
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