The New Nation - Internet Edition

After announcement of the national Budget by Finance Adviser Mirza Azizul Islam on 9 June much review and criticism have taken place. This is what the government also wants, especially in view of the absence of the National Parliament, opinions, reviews and criticisms by the experts and experienced people shall help the government to assess how prudent or infatuated it was in framing the budget. Furthermore, the government shall get guidelines from apt criticisms about the implementation of the budget during period lying ahead.

The finance adviser has termed the budget a 'document of efforts to overcome financial crisis’. Former finance adviser and economist Prof. Wahidudin Mahmud in a newspaper commentary has said that the budget is a document of temporary solution of problems. The incumbent adviser and the former adviser, in fact, say the same thing. Amidst a heap of problems the adviser, after all, cannot be a dreamer, instead of laying emphasis on the current problems he cannot just visualise rosy things. But a stupendous job that has been left to him is the implementation of the budget.

The finance adviser has set eight targets before the government through the budget. The targets are : a) keeping price level rational b) enlargement of social safety net c) employment generation d) boosting of agricultural production e) reduction of regional imbalance in development f) boosting of electricity generation g) food security and lastly h) development of IT sector and the communications network. The targets are fine, they always are so. The problem is to achieve them. The finance adviser must be aware of this and he should be prepared with all of his paraphernalia to undertake the stupendous task awaiting him.

Based on the experience of 2007 and part of 2008 the adviser has rightly laid emphasis on food and has taken security measures. These measures need to be many faceted and an ongoing process of the governmental activity. All concerned must rember that during the dire need of rice only a few months ago how the price of it rose from 460 US dollars to 1000 US dollars a tonne in one night! So, food security is a right target. But the bookish target shall not yield any result without proper implementation. Subsidy and allocation to agriculture under various heads such as agricultural research, land reform measures and subsidised agricultural inputs have been kept in the budget. Two other heads shall supplement this task-allocation to meet emergency needs due to climate change (Taka 300 crore) and provision for work of 100 days for people of potentially distressed areas. Even if allocated money would be available administrative alertness and timely dispensation would be vital.

The total budgeted figure is 100,000 crore Taka. Taka 70,000 crore shall come from internal revenue and grants. Rest 30,000 crore shall be borrowed internally and externally. Target has been fixed to borrow Tk. 13,498 crore from the banking system. In case of deficit, borrowing is always needed. But too much of government borrowing has many negative aftermaths including debt servicing and creating crisis of loan for the private industrial and trade sectors. The government is already burdened with loan, its current account situation is also at the exhaustion level which has compelled the government to contemplate on IMF assistance.

One characteristic of the budget is its revenue expenditure orientation. Three-fourths of the resources shall go after revenue heads. Only one fourth has been earmarked for annual development programmes (ADP). Such a gap between revenue expenditure and development expenditure is quite rare. The finance adviser, of course, has used a logic of his own. He said in almost all previous years full implementation of the ADP have never taken place. He, therefore, to be practical, has kept the size of the ADP small so that it can be implemented to the fullest. Regarding the previous years the adviser is practical but regarding the ensuing year (2008-09) he may not remain practical for the reason that it has come to be a part of the governmental habit not to be serious about implementing the ADP in full irrespective of its size. It is, therefore, apprehended that despite the ADP for the year 2008-09 being small a part of it would remain unimplemented.

Considering the government’s lack of proper control over administration or policy implementation the common sense view is that budget will not prove much helpful for revival of the country’s economy. Helpless people will be faced with financial hardship helplessly. It is also feared that more disturbances in industrial sector will be unavoidable because of salary increase for government officials. Theoretical discussion apart, the caretaker government is not well-placed to give and implement the budget.