At the very outset of his famous poem The Waste Land, T S Eliot has written - "April is the cruelest month" but why? Probably it is very difficult to bloom flower on a dead lilac tree. June is the month of budget which is not always a happy matter to all. Eliot wrote this poem in 1921 just after Spanish Flu pandemic in the world in 1920. Amid covid-19 pandemic national budget of fiscal year 2020-21 has been presented. As April signifies re-birth, proposed budget has been aimed at recovering loss in economy caused by corona pandemic, generating income, creating more employment and attaining 5.2% growth. Size of proposed budget is Tk. 5,68,000 crore with record deficit of Tk 1,90,000 crore, estimated revenue earning Tk. 3,82,013 crore and bank loan Tk. 84,980 crore.
Ruling party and business leaders have congratulated proposed budget but other parties have termed it frustrating and far away from reality. Most of our renowned economists have said that this budget is imaginary and not implementable. Regarding growth they say that no country in the world has dared to fix such an impossible target. When thousands of small and medium enterprises are closed, millions of labours have lost their jobs, a terrible recession in the world is apprehended, export earning is decreasing, 3 billion dollar export order of garments has been cancelled, growth is turning negative all over the world, 8.2% growth is never attainable. Even 5.2% growth in current fiscal year, as demanded by government, is not justified.
Due to imposition or withdrawal of duty or VAT rise and fall in price of some items are natural but getting benefit of decreased price is a rare record in Bangladesh. Inversely, proposed increased price hike becomes effective just from the next day of presenting budget. News reports show repetition of this same tradition in this year also.
Every budget, all over the world, can be appreciated and censured. It is never possible by any government to satisfy all but the effort continues. If analysed sectorwise, education has received the highest allocation but quality education, as educationists believe, is still a distant dream. Initiative to widen social safety net to protect ultra poors and those who have become jobless due to sudden pandemic is praiseworthy. As claimed, government will take necessary steps to uphold growth in agriculture but agriculture, as well as total economy, is nothing absolute. It always depends on many other variables. If there is no natural disaster, if corona pandemic ends, if revenue earning is not hampered, if no unrest arises home and abroad - many such ifs dominate economy of any country.
Critics say that if deficit is deducted then actual size of budget comes to Tk. 3,78,000 crore. Question arises - what is the use of following Charvak Philosophy (eating ghee taking loan) and making burden of loan heavier every year? It makes budget bulky but hardly healthy. Some economists say that government is giving incentive to protect industry but there is no definite guideline to create employment. More than 20 lakh jobless labours will return from abroad. How they will be reemployed? It gives two fold omen - unemployment and fall of remittance. Proposed 100 economic zones for employment of 1 crore persons is not possible within a year. Even 5 years is not sufficient for it.
Providing opportunity to invest undisclosed money is an important aspect of this budget. As proposed, if anybody pays tax at certain rate, no question will be raised by any authority regarding source of investment in securities, undisclosed movable and immovable property, cash, all kinds of bank deposits and savings instruments or certificates. Here also economists and different organisations (TIB, CPD etc) hold contradictory views.
Antagonists say that such opportunity was allowed earlier but no visible investment was found in income or employment generating activities. Moreover, it encourages corruption and it is an injustice to honest taxpayers. Others believe that time is very tough now and the matter is to be considered pragmatically, not ethically. Necessity is to be preferred to morality. Finance Minister has rightly said that extraordinary situation demands extraordinary measures.
Raising exemption limit of income tax to Tk. 3,00,00/- and Tk. 3,50,000/- from existing Tk. 2,50,000/- to Tk. 3,00,000/- will ease burden of marginal tax payers but increasing minimum amount of advance income tax on private vehicles will pinch owners.
Collection of revenue is always a tough task. Target of next financial year is Tk. 3,82,013 crore against Tk. 3,25,600 crore for NBR in current year 2019-20. On 14th May, in a letter to finance secretary, Chairman of National Board of Revenue mentioned that even the revised target of Tk 3,00,500 crore for current 2019-20 fiscal year will not be met . There will be a shortfall of Tk. 15,000 crore. He added that it would not even be possible to achieve the revenue target being intended to be set for the 2020-21 financial year. Similarly, a former president of FBCCI and an important personality in media and garments sector has said that revenue collection is and will remain under tremendous pressure. Rate of tax has been reduced but if businessmen can't carry on business then how they will pay tax.
Facing corona pandemic is the main challenge now. Emergency lump grant of Tk. 10,000 crore has been allocated to face corona. It is an effective initiative but renowned physicians like Dr Ruhul Haque (former health minister from Awami League) and Dr. Rashid-i-Mahbub mentioned in a TV programme on 11th June that health department is not the sole owner of this grant and it is not for treatment of corona only. It will be divided among health, police and other departments working for this purpose. Moreover, a good portion of it will be spent for non-medical purposes like accommodation (hotel rent), transport, fuel etc
In a post budget online press conference finance minister said that this year's budget is not normal but abnormal and there is inconsistency due to a transitional situation. We have to save and feed people. We have to spend first, income is the second count and we have that ability to implement this budget. At present number of return filers is 22 lakhs (against 26 lakh e-TIN holders). More assessee, more tax is the theme but it is very difficult. To popularise online return filing system rebate of Tk. 2,000/- has been proposed for first time e-filers of return. It is indeed a good proposal but it may be extended for at least three years.
It is said that where there is challenge there is opportunity but in this year spaces of opportunities are narrow and challenges are wide. To minimise the gap in an abnormal situation is the prime challenge. Government will certainly try to overcome it. Shakespeare has written - "Time and hour runs through the roughest day" and our finance minster is also optimistic that darkness will be over. We also believe it but nobody knows when.
