The economy is now in the grip of a Corona virus. The rate of economic growth around the world is declining sharply. Where the economy can stand, thinking about it in all quarters. Finance Minister AHM Mustafa Kamal himself has spoken of Corona’s totalitarian aggression in his budget speech. But in the end, he relied on numbers again, putting away Corona’s shock.
A few days ago, the International Monetary Fund (IMF) said in an advance forecast of what was the economy like in 2019 and what it could be like in 2020 that most developed and developing countries will see negative growth this year. There was bad wind in the economic courtyard even before Corona came. Corona came and ruined everything. The pathetic state of the health sector is exposed to the entire country today. Nevertheless, Mustafa Kamal gave the budget with a target of 8.2 percent growth. Two days before the budget announcement, the World Bank said the growth rate for the next fiscal year would be only 1 percent. Doubts are everywhere about whether the budget will match any figure; But the minister says the budget is feasible. In a post-budget virtual press conference, the finance minister said, “This time we could not do the budget as usual. This is not a conventional budget”. But when we read the budget proposals, we can see that he has followed the old pattern. Although the minister spoke of the Corona epidemic, he avoided the impact of the epidemic on the economy in the budget. On the eve of Corona, the nation is seeing the sick look of the country’s health sector. Despite a slight increase in the allocation for the health sector, the total allocation in this sector remained below 1 percent of the country’s GDP. While the government is unable to run its offices with more than 25 per cent staff, the private sector is not fully operational, and there is no real knowledge of when it will happen, the budget has set a revenue target of 9 per cent more than this year’s revised revenue collection.
The NBR has been given a target of collecting revenue of Tk 3 lakh 30 thousand crore in the next financial year. The highest revenue collection is in VAT. One lakh 28 thousand 873 crore has been targeted to be collected in this sector. Besides, one lakh five thousand 475 crore taka will come from income tax and 95 thousand 652 crore taka will come from customs sector. Knowing that none of the three sectors will be able to meet the targets, the Finance Minister will be able to say why the big targets are there. However, over-reliance on VAT means that the state is imposing indirect taxes on the people, which is highly restrictive.
As a result of the slowdown in the economy, the NBR has lagged far behind the tax revenue target set by the Finance Minister in the last fiscal. If the desired revenue is not collected, the government will be forced to rely more on the bank. The situation in the banking sector is not good. If the government relies heavily on bank money, private sector entrepreneurs will not get loans as per the demand. Despite this, the budget says that in the next financial year, the investment of the private sector will be 25.3 percent of the GDP, although this year it has been 12.7 percent. There has been no momentum in private investment over the past decade; this momentum has been further stunted by the Corona. No matter how many fears are expressed, the finance minister thinks that the credit flow to the private sector will increase by 16.7 percent this year. When the economy slows down from the corporate organizations to general public no one’s income increases that much. Trade is also low. As a result, the government’s income from taxes is reduced. However, the finance minister has reduced the corporate tax on unlisted companies by 2.5 per cent, which has been welcomed by the business community.
Tax evasion, action against tax fraud is needed; good governance in the banking sector is needed. To be realistic by reducing unnecessary government expenditure, To be more frugal about development projects, Then maybe there will be some protection. Budget day means the day of unveiling financial thoughts. It will take some more time to understand how much the government has in mind about those who lost their jobs, lost their livelihoods and came back from abroad. The credibility of the budget is based on consistency in commitment, allocation and expenditure. What will it be?
The author is a student of Rajshahi University