As it attempts to balance the budget, it would appear the government is veering further away from encouraging wealth accrual than ever before. The response towards tackling the three-pronged devils that ail the economy is predictable. With local investments down, revenue collections assured of not meeting targets and a lethargic pace in implementing the Annual Development Programme (ADP), last Sunday's meeting of the financial top-notch was sober.
Cutting ADP spend to cope with revenue short-fall is loaded dice. Essentially there is a connection but in Bangladesh's case it is a red-herring. Overambitious revenue figures devoid of reality look good in print but that's about it. As for the reduction in ADP, that comes only because implementation has just not happened at the desired speed.
None of this is new. Each year, though the National Board of Revenue (NBR) chief always puts on a brave face, officials down the line mutter and grumble with their targets that are usually a one-third jump over the previous year. And though the Finance Minister says the gross domestic product (GDP)-tax ratio in Bangladesh is one of the lowest in the region, that is due essentially to the spends in sectors of the grey economy. On one hand, the increase in pay and bonuses for the public sector is more than warranted. In fact there should be questions asked as to how the public servants made two ends meet between their last pay rise and now, with all the vagaries of inflation, transport and education cost, not to mention the finer elements of socialising and buying clothes.
The answer has to be simple. Either they have a second form of income; or they have to resort to graft. Last Saturday, a drama dialogue on state-owned BTV said as much. In a matrimonial proposal discussion, the groom's parents stated that a government employee retired from the foreign service without a home in Dhaka had to be honest. The alternative is easy to surmise. It was also strange to hear the new governor of Bangladesh Bank suggesting that interest rates on savings instruments be reduced so that the lending rate of banks in turn can be reduced further.
Strange, because the message given by the citizenry isn't getting through. They invest in the bonds simply because the returns on other investments are so abysmal. The circus named stock market continues to run in the red with few having the patience to wait for dividends and finding windfalls difficult to come by. Bank interests are on decline and after the rather silly tax on accounts, whatever income from interest, that again minus the tax is so far below inflation so as to make it unviable. And with the merry charade of scams confidence in the banking system has eroded.
In the meantime, costs have spiralled, beyond the norms of calculated inflation. School tuition, private tuition, transport and rickshaw fares are all on the up. Temporary (albeit artificial) scarcity of essentials create those temporary phases when hard savings take a buffeting not to mention the economic realities of days that are dear from religious or nationalistic emotions when the already dwindled savings take another hit. The two taka alms are viewed with scorn by beggars and when utilities department do their jobs they too seek tips for jobs they're contracted for.
Whether the Governor or the Finance Minister is aware of this one cannot say. But maybe in the coming Ramadan the penny might drop. The rickshaw puller too will want to celebrate Eid, the lineman will make his twice-annual call to check whether the phones are working, the community rubbish gatherer will digitalise their claim for som Eidi and the polite demands for Fitra and Zakat will make rounds. All in very good spirit. But-umm- where it does come from unless the government does consider the costs in-between.
(The writer may be reached at [email protected])