The New Nation - Internet Edition

Staff Reporter

A Taka 99,962 crore national budget, with an overall deficit of Taka 24,234 crore, for fiscal 2008-09 was announced by Finance Adviser Mirza Azizul Islam through radio and television yesterday.

The 54-page budget speech is reflective of the tight rope he had to walk on while preparing the annual national statement of income and expenditure. Unprecedented price hike both in international and domestic markets created problems that were exacerbated by repeated natural disasters during the current fiscal (2007-08).

It is therefore only natural that apart from the goals of macro-economic stability, acceleration of growth and poverty reduction, priority has been given to keeping prices at affordable levels, expansion of the social safety net, and food security, among others.

The fiscal measures proposed seek to increase revenue earnings marginally from Taka 60,539 crore shown achieved in the revised budget for the current year to Taka 69,382 crore in next fiscal. Another compromise made was reduction of size of the Annual Development Programme by Taka 900 crore from the current year's original budget estimate of Taka 26,500 crore.

The Finance Adviser was candid in his statement of the adverse situation he faced both internally and externally, and despite increase of size of the budget speech by about 50 per cent over last year's he had little space to spare to profess through it the philosophy and ideals of the government.

Of the total resources the Finance Adviser seeks to mobilise, 54.5 per cent would come from tax revenue, 12.6 per cent from non-tax revenue and 2.3 per cent from non-NBR tax revenue. Foreign loans and domestic borrowing to form 24.2 per cent of the resources and foreign grants another 6.4 per cent.

Of the tax revenue of Taka 54,500 crore, 37.1 per cent is expected to come from value added tax (VAT), 19.9 per cent from import duty, 24 per cent from income tax and 15.5 per cent from supplementary duty.

Education, and information and communication technology gets the highest budgetary allocation of 12.3 per cent followed by 11.3 per cent earmarked for the energy and power sector, 9.1 per cent each for agriculture and public administration, 8.2 per cent for social security and welfare, 7.3 per cent for local government and rural development, 6.4 per cent for defence, 6.1 per cent for transport and communication, 5.9 per cent for health, 5.6 per cent for public order and security.

However, debt servicing takes the largest single chunk (12.6 per cent) of budget resources, official papers show.

Mirza Azizul Islam said that an all-out agricultural rehabilitation plan and steps taken to expand trade and investment activities helped overcome the negative effects of the adverse situation as Boro rice output stood at 175 lakh tones. The rate of the growth of Gross Domestic Product thus has been estimated at 6.2 per cent. Next year the GDP growth rate would be 6.5 per cent if the economy did not suffer major natural disasters, he said.

Due to production loss of food grains and increase of import prices the public life was under strain. And in December inflation shot up to 11.6 per cent which, the adviser said, has started coming down. He was optimistic that next year the inflation would come down to nine per cent.

During the current year the overall expenditure of the government increased from an estimated Taka 79,614 crore to Taka 86,085 crore with an overall deficit of Taka 28,679 crore. The deficit is being met with soft term foreign loan and domestic borrowing. In addition mobilised Taka 7,523 crore by issuing treasury bonds to pay for the accumulated loss of the Bangladesh Petroleum Corporation.

Imports increased by 25 per cent due to large scale import of foodgrains. Export earnings growth has been estimated at 15 per cent. The growth of remittance was 31.5 per cent during the July-April period compared to that of the preceding year. Thus the current account of balance of payments recorded a surplus of US 39 crore dollars, the Finance Adviser said.

The fiscal measures include retention of the current year's tax exempt income limit, however increasing the same to Taka 1.65 lakh for taxpayers who are women or above the age of 70 years. For those relying wholly on agricultural income the limit has been increased to Taka two lakh and 2.15 lakh respectively.

Corporate income tax has been reduced although tax on dividend income has been raised. Losing companies would not have to pay tax on the basis of turnover, the taxation proposals say.

The Adviser has proposed to reduce import duty on capital machinery and raw materials. Small and Medium Enterprises (SMEs) would enjoy tax holiday, while income from computer software, data processing, data entry and call centres will remain tax-free till June 2011.

The threshold base for value added tax has been increased from Taka 20 lakh to Taka 24 Lakh while the limit for collection of income at sources from house rent had been increased from Taka 15,000 to Taka 20,000. To discourage import of luxury transports and encourage the import of automobiles used for carrying industrial raw materials and passengers, import duties have been adjusted.

To increase the tax base another opportunity had been given to whiten black money from July to October this year by paying tax at the existing rates and seven per cent penalty on payable tax.

The Finance Adviser had proposed to withdraw the tax exempt income benefit enjoyed by all foreign technicians.

The budget proposes to enhance the old age allowance, injured freedom fighters allowance and the same for poor disabled people, expand maternity allowance and create lean time job opportunities in rural areas. It also makes provision for balanced regional development by making special allocations for backward and ultra poor areas.

The government would be open to suggestions that would be offered to improve the proposals made in the budget through e-mail or letters. Suggestions received till 16 June would be considered with all seriousness, Mirza Azizul Islam said.

Aug 21 grenade attack on AL rally: Chargesheet by Wednesday

Staff Reporter

Inspector General of Police (IGP) Noor Mohammad yesterday said the chargesheet in the August-21 grenade attack on an Awami League rally will be submitted by June 11.

"The chargesheet will be submitted by Wednesday as all the formalities in this regard have been completed," IGP told the reporters at a press briefing at the Police Headquarters.

While asked about the number of accused in the chargesheet, he replied that everyone would be informed about it after submission of the chargesheet.

The grenade attack on the Awami League rally at Bangabandhu Avenue on August 21, 2004 left 24 leaders and activists of the party killed and some 300 injured, including party President Sheikh Hasina.

About the recent drive against illegal arms holders and terrorists, IGP said, "The special drive was not intended to harass or arrest politicians. Those arrested during the last few days were held on specific charges and allegations."

"The law-enforcing agencies arrested a total of 20,002 people across the country till yesterday under the special drive that started on May 28. The arrest figure was 16,138 during the same period last year," said Noor Mohammad.

"The law-enforcing agencies are arresting some 1,667 people on average each day in the ongoing drive. Usually, 1,345 people are arrested everyday," he said.

The area-wise charts of listed criminals are being updated aiming to hold the upcoming general election peacefully, he added.