A local research organisation has termed the proposed budget for fiscal year 2006-07 as a ‘budget for everybody, but for nobody,’ as it contains ‘unrealistic expenditure and impossible income plans.’
   
‘It appears that the budget preparation process took the public expenditure outlay as the point of departure and then made revenue projections with the shortfall covered by foreign and domestic financing,’ said Debapriya Bhattacharya, executive director of the Centre for Policy Dialogue, while analysing the new budget at a press briefing at the CIRDAP auditorium in Dhaka Friday.
   
He viewed that as the finance ministry has tried to satisfy everybody, the spending outlay increased significantly but his income projection appears improbable.
   
The economist also questioned the effectiveness of the supportive monetary and fiscal measures for the proposed budget.
   
‘The proposed fiscal measures in general indicate an attempt to liberalise the trade regime further and to make inputs available at globally acceptable price,’ he added.
   
‘But current tariff structure continues to protect specific interest group as it is in the case of newsprint,’ he continued.
   
Bhattacharya termed the continuation of high tariff on newsprint import, 25 per cent currently, as ‘anti-knowledge taxation’ and said that in neighbouring countries the import duty on newsprint is much lower—6 per cent in Pakistan, 5 in Nepal and 2.5 in Sri Lanka.
   
The economist also criticised the reduction of tax on SIM card from Tk 900 to Tk 800 as the ‘telecom companies are currently providing subsidy to the consumers’ and Tk 100 tax reduction would reduce their tax burden.
   
‘When these mobile companies earning and repatriating huge profits, such reduction is not rationale and the government may rather increase the tax to Tk 1200,’ he said.
   
He also said that proposed income tax structure would ultimately benefit the higher income group, not the limited and low income people.
   
Bhattacharya also said that acute power crisis is not addressed in the budget as it seems that government is fully depending on foreign fund to develop its power-infrastructure.
   
The economist, however, appreciated the 3 per cent advance income tax on credit card users and bringing different services like hotel, and decorator under the VAT net.
   
In reply to a question, Bhattacharya said that although there would be a spending spree keeping the national election in mind, it will not be very easy to spend money.
   
‘One can term it an election budget, if the budgetary allocations are finally spent for the poor people, for the voters,’ he said.
   
‘But, if the vested interest intermediaries group grab the funds, the voters will not get the money allocated for them,’ he added.
   
The economist also said that with the election nearing, the administration would be reluctant gradually to implement budgetary measures and so the spending.
   
‘Other than some initiatives in the tax administration, the budget doesn’t recognise the poor side of policy management of the government,’ he added.
   
‘The finance minister, in his budget speech, mentioned in three places the adverse impact of corruption but doesn’t even mention about the anti-corruption commission or any other initiatives to check wastage, leakage and outright theft of public resources,’ he continued.
   
Bhattacharya termed the announcement of fuel price hike a ‘bold’ step of government saying that this would give some ‘breathing space’ to the government in reducing loss of Bangladesh Petroleum Corporation that has put huge financial burden to the largest state-owned lender Sonali Bank.
   
The economist also said that as the government would go for higher bank borrowing, coupled with oil price hike, inflation would continue to be a key concern for the economy followed by interest rate and exchange rate.
   
‘The incoming caretaker government and later the new political government will have the scope to revise the proposed budgetary expenditure,’ he added.
   
Among others, members of the CPD’s core research team, Fatema Yousuf, Uttam Deb, Fahmida Khatun, Khondaker Golam Moazzem and Syeed Ahamed attended the press
briefing.