The National FY Budget 2019-20 in Bangladesh : Realities, Limitations and

Potentials
It is expected that the statistics of the budget should be realistic and implementable where there
are a few specific planning for the long-term development of the country and the standard of
ambitious growth rate of the economy is under question because of increasing income disparity.

The families of middle –income and lower-income denominations will be under pressure and the
government should postpone the bad and problematic culture of loan default where the proposed
budget doesn’t tend to be justified, discussed and criticized by the representatives of the
parliament.

The investment in the private sector should be enhanced for national development and the most-
discussed banking sector should be reformed and restructured though there is no specific
proposal and initiative in this regard.

The struggling and neglected agriculture sector is expected to be given subsidy, but the major
crisis in this sector is to ensure the reasonable prices of the agricultural commodities for which
the government isn’t concerned enough.

Long-term reform in the sectors other than the agricultural one isn’t visible in the proposed
budget though this form of reform is essential to ensure good governance and the environment to
reach the goal of 10% growth which the Finance Minister has dreamt isn’t ensured here.

The main source of revenue collection is the collection of taxes by the NBR, but the target of
securing Tk. 3,25,600 crore is not only tough and difficult but also impossible to implement
seemingly.

In this regard, revenue income excluding taxes and the profits of the state-owned commercial
institutions should be the major sources of income though these institutions are being provided
with subsidy and compensation for the sake of corruption, lack of skill, political influence,
mismanagement and insufficiency.

The standard of the monitoring and controlling institutions is substandard though there is no
specific declaration in this budget to improve the development of the standard of these
institutions.

Though the major source of internal financing is the banking sector, the capital market has
become a totally ineffective organization and therefore, the trend of loan default is increasing.

The growth rate of the deposits and the private sector loan are decreasing, it is troublesome to
determine the deliberate and unwilling defaulters though it has been declared to take appropriate
measures against the deliberate defaulters.
It is imperative to ensure the proper implementation of the existing laws rather than forming
‘Bank Commission’ and the reform of the laws where it isn’t possible to solve the difficulties as
there are many default cases pending in the Money Loan Court in the country.

It is important to implement this traditional proposed budget and the main challenge is to ensure
equitable growth in all of the sectors.

Though troubled with the financial sector, the country will embrace the risk of the standard of
education in the long run because Bangladesh isn’t able to manage good, efficient and effective
manpower to face the fourth industrial revolution.

Though the growth of GDP, per capita income and the average age level of the people of the
country are on the decrease, the disparity in case of income and wealth is also on the rise.

The upper income people have been facilitated as the surcharge of the wealthy people has been
decreased and the opportunity is given to whiten the black money in case of purchasing flats and
lands as well as receiving tax-cuts as extra benefits, but the tax-free income limit isn’t considered
yet.

The revenue initiative of this budget is sufficient in which the people of upper-income level are
getting privilege and there is a provision for the poor people marginally. Nevertheless, the
expanding middle-income and lower-middle income families won’t be benefited though the
middle-income families are the drivers of most of the aspects like thoughts, earnings, intellect
etc.

As Bangladesh is facing much level of discrimination gradually, it’s difficult to preserve the
current rate of growth at 7, 8 or 9 per cent where Bangladesh has achieved its independence
through fighting against disparities and anomalies. There are little steps to combat increasing
pressure and the most expected reform in the banking sector is yet to be materialized

The proposed budget has benefitted those who are the beneficiaries of bad governance while it’s
a matter of regret that the Bangladeshi people haven’t seen the political commitment or
economic strategies for an expected change. This commitment or strategy is part of the manifesto
of the current government which is also seen in the 7 th five-year plan and therefore, it is
regrettable.

The good aspects of this budget are to enhance the tax-free revenue, to retain the development
expenditure at 7% in proportion to the total GDP, not to undertake projects of numerous
unnecessary numbers and to initiate crop insurance.

Though the condition of the capital market won’t be enhanced without good governance, there
are little questions regarding the initiatives taken for the well-being of the capital market and it’s
a proper step to reduce VAT in case of products and services in the VAT law.
Public administration has been prioritized in case of disbursement in comparison to education
and transport sector where the sectors like public administration and transport have received
increased rate of disbursement in this FY budget 2019-20. In case of disbursement, education
sector has been embedded with science and technology in which the allotment in the education
sector decreases sharply if it is considered solely and the budgetary allocation is only 5% in case
of education, health and social security.

The process of whitening black money which has been considered a consistent culture has been
continued in case of investment in the purchase of flats, new pieces of land, economic zones and
hi-tech parks.

Now it’s time to differentiate between money earned in a legitimate way though non-disclosed
and the illegitimate money where it’s against the constitution if the illegal money is invested
without questions and interrogation.

It’s obviously clear for the banking sector and capital market that those who tend to be affected
through reform aren’t willing to happen that. It’s problematic to form ‘Banking Commission’ as
there is a complexity of data and information in this regard and it’s pathetic that the beneficiaries
are the today’s policy-makers.

It’s not supportive in any argument to raise the rate of tax in the mobile and this type of
telecommunication service since it’s essential to use mobile phone service for the lower-income
families as per of their daily activities. The tax authority tends to secure more revenue from this
sector as it’s very easy to collect tax revenue from this sector, however it’s important to consider
the issue of justice in this case and pathetically, the large portion of indirect tax revenue is being
secured from the mobile companies.

The source tax of savings certificates has been targeted at 10% which was targeted at 5% in 2016
and in this way it’s a huge problem for the families who largely depends on the savings
certificates.

In the recent years, the flow of the development of growth isn’t consistent with the that of
creation of employment opportunities where such type of employment-unfriendly economic
growth is instrumental in enhancing different types of economic and social disparities and social
unrest.

The allotment for the youth generation of TK. 100 crore in business entrepreneurship, especially
in the ‘Start-up Business’ is truly a positive initiative in which huge level of investment in the
personal level isn’t possible without ensuring the development of business environment, the
solution of the crises in the banking sector and the implementation of visible and timely
infrastructural projects.