National Budget Focus on poverty reduction
Tk 60,000cr National Budget to be placed in JS tomorrow

The National Budget for fiscal 2004-05 will be placed in Parliament tomorrow (Thursday) with a hefty outlay of around Tk 60,000 crore in total, fixing its focus on poverty reduction, reports UNB.

Finance and Planning Minister M Saifur Rahman would lay the budget before the House—a rare privilege for him to do it for the 10th time around.

The budget session of Parliament begins today (Wednesday). President Prof. Dr. Iajuddin Ahmed has summoned the 12th session at 5pm on the day.

Officials were busy giving final touches to the already-drafted budget for the coming fiscal year, which they said would be consistent with government’s poverty-reduction strategy paper (PRSP) and a three-year rolling investment programme.

It would also be tuned to a midterm financial structure up to 2008 that includes a guideline for resource mobilization as well as spending.

Officials said the revenue budget would be surplus one, as of previous times, but there will be overall deficit in the total account. But the fiscal deficit would range from 4 to 5 per cent.

The exchequer estimates 16 percent growth in the revenue collection to Tk 32,000 crore from the NBR component while expects Tk 8,000 crore from non-NBR portion of the revenues.

The revenue expenditure would also increase to some extent, not so much, as compared to the outgoing fiscal year’s mark of Tk 28,969 crore, officials said.

They said dependence on import duty is likely to shrink while emphasis would be given on VAT and income tax, casting wide the net. There is hardly any possibility of raising the tax rates.

The budget would announce measures like appointment of tax ombudsman to increase revenue collection through checking corruption and reducing the harassment on the taxpayers by the tax officials.

On May 29, the National Economic Council (NEC) approved the development budget of Tk 22,800 crore for the next fiscal, which was Tk 20,300 crore in 2003-04. The outgoing ADP was also revised in another NEC meeting earlier to Tk 19,000 crore.

The national budget for fiscal 2004-05 would hava a special fund–Tk 100 crore for ultra poor, Tk 300 crore for micro-credit operations and a block allocation to face the possible fallout of post-MFA open market competition. It would also have increased allocation for primary and secondary scholarships, allowances for old-age population and widows.

Measures would be taken to expedite policy and institutional reforms as well as there would be measures so the SOE employees do not lose their jobs in the restructuring process.

The budget for 20004-05 is likely stipulate measures for removing the clash of interests between rural and urban areas as well as reducing the yawning rich-poor gap.

Governance elements would come into the core of the budget while reform measures would have a humane touch so that the poor got benefit out of it. It would expand the social safety-net schemes like old-age pension.

It would also lay stress on decentralization to stop unethical practice by the local-government bodies like municipal corporations and to accelerate their activities.

The main focus would be on reduction of poverty through generating employment, mainly in the rural areas.

The budget would not be to create a few rich but be equity-based, pro-poor and ensure social justice. It would also be ensured in the budget that the benefits of the reforms chalked out do not fatten the purse of the rich.

It would try to divert resources to rural areas from the urban areas to ensure equitable redistribution of national wealth. It would have ground-looking steps.

Agriculture is expected to get double the allocation of the current budget. Credit flow into agriculture would be increased only considering the spirit of the entrepreneurs.

It would try to keep the requirements of collateral as low as possible. Special steps would be taken to provide funds for development of agro-based industry. Agricultural irrigation-oriented programmes would get special attention.

On infrastructure, railway and inland water transport would get the highest priority in the revenue budget as also given in the development budget. Rural road networks would be considered in the cases where it would be required for marketing farm produce.

The budget would consider a measure to provide collateral-free credits for educated unemployed youths so they can enter into business on their own.

To address law-and-order problem—a pain in the neck of all—the budget would provide special allocation in continuation of the measures to strengthen the police force.

Businesses having trade licenses would come under a mandatory fiscal measure to submit their respective tax returns as part of the government’s bid to increase revenue. They must have to submit returns. It does not mean that they’ll have to pay tax if their earning is not taxable.

The budget would try to address the historical hangover of complex taxation system to reduce harassment by tax officials often blamed for poor revenue receipt.

The budget would have a three-tier tariff structure instead of earlier four-tier rates apparently to lower the rates towards further liberalization of trade, in compliance with extraneous pressure. Multilateral donor agencies had also cajoled the government for setting the slabs low before last budget.