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Legacy of optimistic Budget: Big but brittle -Mohammad Azizul Hoque

Economy

Middle class people seemed to have no suitable place of breathing in Bangladesh due to widespread VAT in Bazar. Since independence 1971 to 2017, Bangladesh witness around 47 national budgets and 2017-18 fiscal budget i.e. 400,226 crore, is seemed very big but brittle due to lack of apt implementation strategy. However ‘If the policy is good then the outcomes would be good’ is a common assumption albeit success of a policy depends on how well it is implemented.
Another common legacy is every successive government formulates policy and program including national budget aiming largely to secure elite’s interest and slight allocation for poor in the name of fighting poverty and no notable portion for middle class. Yet inquisition is why budget is repeatedly elite centered and why lower class is exploited while middle class is excluded?
It is why budget is formulated by political and bureaucratic elite and both groups are highly influenced by business elites who conversely remain sincere to secure their own interest largely. So tradeoff takes place usually between elites. Elsewhere lower class is too important to elites to accomplish hardworking tasks like driving his car, catching fish, producing crops, washing clothes, cleaning sewerage and guarding his bungalow etc. It is why due to deep rooted colonial legacy, illiteracy, culture of ignorance and lack of political consciousness which ultimately resulted from high illiteracy, continuous deprivation, wide gaps between center and periphery and a believe that “nothing would be changed even you talk over or as much as you do.
Unfortunately the consequence of every bygone budget is it was not implemented completely and a remarkable portion of money remained unused. It is why because before January-February required money is not got form sources. Once it is got all ministries prompted to spend it taking instant variety of random projects. Unfortunately within such hustle moment, no project (specially small and middle) is properly implemented. Verily performance is measured here based on how much money you can spend rather than outcomes.
Interestingly Annual Development Program (ADP) budget is always large and rest of some significant sector like health and education, poverty reduction and unemployment generation narrowly ignored. Here political will plays pivotal role and every successive government interested to such project that is visible and easily marketable to pursue vote for election. Nevertheless the ADP budget is also not properly utilized due to dependency on donor, not having feasible and realistic strategy framework, political instability, red-tappism, corruption that escalates the stagnation.
However budget’s lion portion is spending for the salary and numeration of government personnel. Because providing handsome bonus, making them exultant is momentous to run office smoothly and sustaining regime. Albeit reality is budget cannot be implemented successfully only behalf of bureaucracy unless people’s representative are strongly involve into the process.
Recently VAT, emerged in 1991, and income tax has been large source of revenue of national budget. Earlier it was imposed on only luxurious goods and income tax.  But recently 15% VAT policy, decided to apply simultaneously on all classes of people irrespective of income disparity, which is seen as pure injustice and insult to injury to lower as well as middle class people. Albeit (According to CIA fact book, 2017 ) the standard VAT rate in Malaysia is 6%, 7% in Singapore, 10% in Indonesia, 5% in Nigeria and 12% in the Philippines but 15 % and nevertheless 15% in Bangladesh that’s numerous people live by hand to mouth system.
Elsewhere imposing high excise duty on bank balance becomes a fuel to fire by this budget where at least 800 taka will charged if bank balance exceeds tk 1 lakh to 10 lakh taka. Similarly Tk 2,500 will charge for tk-10 Lakh to tk-1 crore, Tk 12,000 for 1 crore to 5 crore, Tk 25,000 will be applied for Tk 5 crore plus. Additionally 15 % extra VAT will be applied on profile of deposits. When tax collection from individuals is getting difficulties and time-consuming then government is seeking easy sources of income like citizen’s bank balance.
This decision certainly will raise prices of common goods which ultimately affects the lower and middle class although a poor struggling from dawn to dusk, dropping blood and sweat down the ground, just to manage a plate of food to live. Unfortunately he also has to pay 800 taka excise duty and 15% VAT for his 1 lakh taka bank balance that credited for his girl’s marriage or constructing Brocken-Hut. Now the buzzing question is who is truly going to be benefited from the optimistic budget?
The writer is the Fellow, Teach For Bangladesh (TFB). (azizdu12@gmail.com).

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