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Budgetary stance for FY 2022-23


Budgetary stance for FY 2022-23

The shooting up of the national budget outlay of a less developed country like Bangladesh from Tk 7,860 million in Fiscal Year 1972-73 to Tk 6.78 trillion in FY 2022-23 is a humble and normal graduation. The graduation spans a total of 51 years. While chronicling the process of this climb, the country's size of population and other parameters ought to be kept in mind. In the post-Liberation War Bangladesh in 1972-73, the country's population was at a little over 70 million. In 2022-23, it stood at 160 million. By the average global standard of population rises in both the poorer and affluent countries, the Bangladesh figure might seem quite high. But many pragmatically disposed economists and population experts are expected to accept the population figure as part of reality. According to the dictates of nature, the fertility rate of hot and humid countries have globally been seen to remain at an upward trend. Bangladesh belongs to this class. 

In its early days, phases of socio-economic, as well as political, turmoil have charaterised the nation which gained its independence in 1971. In achieving its political freedom from the clutches of an oppressive state, it had no other way but to wage an all-out armed struggle against despotic rulers. Thanks to the unflinching unity forged among the exploited people of Bangladesh, the then smaller province called East Pakistan attained its independent status in just nine months. The new state, as had been feared, inherited a poor and vulnerable economy plagued by a bleak future. 

It was its post-independent leaders in every national economic sector, economic planners, members of the administration, the intelligentsia including learned teachers, who had volunteered to shoulder their respective roles in nation building. As seen in the formative stage of many poorer nations, unscrupulous elements and economic syndicates had also infiltrated the nation. It took the country more than two decades to declare itself tolerably cleansed of its major social and economic ills, and their fallout. As the country entered the 21st century, its governments and the think tanks realised the importance of balanced budgets announced at the start of every fiscal year. To speak forthrightly, the national budgets formulated every year have turned into a formality. In the developed countries, the government policymakers attach great importance to the basic measures of a year's national budget. The pre-budget and post-budget commentaries are, thus, considered a prerequisite for this all-important national document proposing economic measures for the coming year. 

The budget-making process doesn't end with the announcement of a government's spending measures in parliament. Before a new budget's detailed account of the government's spending on the citizens, imposition of extra revenues, taxes, duties, and also financial incentives etc is formally approved by parliament, debates in favour of and against the proposed fiscal measures have to take place. It has become the rule. In the absolute monarchies, the kings or the emperors are the sources of all state powers including that of spending on public and imposing taxes. A common notion outside many ex-communist countries was the party hierarchies' supreme role in the approval of the states' budgets. In fact, an administrative command system used to run a distinctive form of central planning. 

Against both a socio-politically and economically fluid background, the national budget for 2022-23 was announced in Bangladesh parliament on June 9 by Finance Minister AHM Mustafa Kamal. The budget document, the outlay being Tk 6.78 trillion, comes amid a debilitating inflationary pressure on the economy. This disincentive notwithstanding, the government has proposed increase in spending on agriculture, food and power sectors in the form of allocations and subsidies, besides enhancement in social safety net outlets. All this is aimed at making the pressure of inflation endurable for the sufferers. After a two-year-long pandemic-prompted setback disrupting normal economic and trade activities around the globe, the new Bangladesh budget has been made to go through a series of testing times. Apart from the corona stalemate found on the economic front, another intractable impasse continues threatening the nations far and wide with its ever-expanding fallout. They are created by the months-long Russia-Ukraine War, the sanctions on Moscow, the direct supply of sophisticated weapons to NATO-leaning Kiev. Presumably, a man-made disaster stares the world in the face. Bangladesh may find it hard to escape the war's economic fallout. In its 51 years of existence, the country has never faced such an inauspicious time which coincides with its yearly schedule of presenting its budget to the nation. The government has opted for a huge outlay with eye on GDP growth at 7.5 per cent. The Finance Minister has observed that higher bank borrowings will cause 'crowding-out' effect on the economy. 

In a post-budget press conference on the next day, the Finance Minister didn't dither over saying candidly that the amnesty awaiting the tax evaders holding assets outside the country would be successful. As he has observed, the step will contribute to the national economy and help in job creation. But on the issue of inflationary pressure stemming from armed hostilities abroad, the minister appeared helpless. However, he sounded optimistic about measures for managing internal factors behind price rise of essentials. At one point, the minister elaborated on the many techniques used in capital flight. He revealed that the amnesty in question was available in at least 17 countries. He said money was even laundered on grounds of the 'existing system'. Although the minister has said the budget has been prepared for the marginalised people, many experts differed and termed the social safety net for them not sufficiently wider. 

Although the budget document maintains that the poor and the businesses will be equally benefitted, experts from the CPD have disapproved of the step of providing more support to higher income group, and keeping the low and middle-income groups in a tight spot. Due to its being formulated in adverse times, filled with stop-gap remedies, meeting the budgetary goals may not be a cakewalk. Unforeseen challenges keep lurking.  

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