Inflationary pressure, electricity crisis and garment unrest are among the factors that will continue to pose challenge to the government in the next fiscal as well, as the proposed new budget lacks a sense of direction to get rid of those problems, a local research organisation says.

Although the government is taking credit of higher GDP growth and hoping this year’s growth somewhere near 7 per cent, it has failed to make any effect in poverty reduction during the last five years, said Atiur Rahman, chairman of Unnayan Shamunnay.
   
The number of poor people dropped at a rate of 0.5 per cent during the period, much lower than 3 per cent rate as envisaged in the PRSP to meet UN millennium development goals of halving poverty by 2015, he pointed out.
   
The next government would land in a critical situation to fulfill the budgetary target of huge revenue earning of Tk 52,542 crore as the import duty on intermediate goods has been slashed.
   
Depleting incomes from import revenue would force the government to borrow heavily from banks to finance the deficit, ultimately fuelling the inflation further. He observed that the real allocations proposed for health, electricity and education sectors would not be much supportive to achieve the MDGs and the PRSP targets.

Per capita allocation for health service is only less then one taka (ninety-three paisa) daily, which needs to be at least two per cent of the GDP.
  
Possibility to bring out any change in electricity sector remains bleak in terms of allocation proposed in the new budget, the economist felt. Terming the proposed budget as ambitious and conducive to corruption, Atiur said the budget has increased the target of indirect tax like VAT to Tk 14,319 crore, which is higher by 19 per cent than the amount expected in the revised budget of 2005-06. Such increase in indirect tax revenue would fuel the price hike of essentials in the next fiscal.
  
The price increase of petroleum products specifically of kerosene and diesel, announced on the day of budget placement on June 8, would increase the transport charge and commodity prices as well, ultimately adding to the sufferings of the common people, the economist said.
  
In short, the budget will be difficult for the three governments, including the present one, to implement, and whatever benefit it may yield, it would go to the ruling party people, not the poor, he felt.