No major changes
Abu Sazzad: The proposed budget is going pass in the parliament today (Tuesday) without any big changes. There is no possibility of any major amendment except for a few minor issues from the proposed budget placed by Finance Minister AHM Mustafa Kamal on June 11, said the Finance Ministry sources.
The government has proposed a 5 percent hike in the supplementary duty (SD) on mobile phone services. The supplementary duty has been proposed at 15 percent from the existing 10 percent on services provided through mobile phone SIM/RIM cards. Meanwhile, all types of supplementary duties became effective with the budget proposal. However, the additional tax imposed on mobile phone may be withdrawn in the final budget.
Besides, some minor changes may be take place in the proposed VAT collection policy. The finance minister proposed to raise the ceiling for tax-free income threshold to Tk 3 lac from the existing ceiling of Tk 2.5 lac that may be changed in the final budget, NBR sources said.
Considering the coronavirus situation, the budgetary allocation for health sector may be increased. In the proposed budget, the allocation for the health sector was Tk 29,247 crore. On June 11 this year, the finance minister declared the biggest budget worth Tk 5.80 trillion for the fiscal year 2020-21. Experts said, so far, the government has undertaken four comprehensive plans to overcome the possible negative impacts of pandemic on the economy and people which are not enough.
As per the proposed budget, the government is discouraging the luxury expenditures and prioritize government spending that creates job.
Besides, the government is creating loan facilities through commercial banks at subsidised interest rate for the affected industries and businesses so that they can revive their economic activities and maintain competitiveness home and abroad. The next strategy is to expand the coverage of the government’s social safety net programmes to protect the extreme poor and low paid workers of the informal sector from the sudden loss of their source of earning due to pandemic. Finally, the government will increase money supply to the economy while making a delicate balance between increased money supply and possible inflationary pressure.
According to a survey of Bangladesh Institute of Development Studies (BIDS), about 13 per cent people have become unemployed in the country and Bangladesh will have 16.4 million new poor in 2020 as the income of working class in urban and rural areas have fallen sharply due to the lockdown to stop the spread of Covid-19 pandemic.
According to media report, over 36 million people have lost their jobs since the first day of the countrywide shutdown on March 26 to prevent the spread of coronavirus. Around 61 million people are currently working in the country’s job market. Nearly 59.5 million people moved into different class structures during this period, of which 25.5 million people became extremely poor.
Global Economist Forum (GEF) President Dr Enayet Karim said, the government need to present a time befitting budget through which people can get relief from the ongoing and post COVID-19 outbreak.
He lay emphasize on the fund mobilization to implement the targets of such irrational budget. Commenting on the expectation from the final budget, the GEF president said, the final budget need to focus to arrange fund for saving people from the ongoing COVID-19 pandemic because money collection is one of the major challenges in the coming days. He recommend for introducing government bond to manage fund immediately.
Dr Salehuddin Ahmed, former governor of Bangladesh Bank underscored the need for undertaking specific guidelines in the final budget to save people from the ongoing disaster. The government declared traditional and ambitious budget is not enough to rescue people from the ongoing disaster. Apart from the traditional budgetary allocation and targets, the government should provide specific guidelines to strengthen the capability of the financial sector especially for the banking sector and capital market.