The proposed national budget for the upcoming fiscal year lacks the necessary directives to stabilise the macroeconomy and address the ongoing crises, according to the Centre for Policy Dialogue (CPD).
The premier think-tank criticised the budget for setting overly ambitious targets for economic indicators without considering the current economic realities.
"Instead of focusing on growth during the current period, the budget needs to take initiatives to address the crisis," said Fahmida Khatun, CPD's executive director, during a press briefing today (7 June).
Commenting that a typical budget has been given in these challenging times, she added, "This budget is conventional like any other. This budget cannot tackle the crisis."
Earlier yesterday (6 June), Finance Minister Abul Hassan Mahmood Ali presented the proposed National Budget of Tk7,96,900 crore to parliament.
CPD Distinguished Fellow Professor Mustafizur Rahman pointed out that the significant rise in commodity prices over the past few years has put the general public under severe strain.
He noted that while inflation has hovered around 10% for over two years, real wages for workers have only increased by 5%, leaving the poor struggling to cope.
"The inflation of essential commodities for low-income people has exceeded 20%. This has made their lives more difficult," he added.
Khondaker Golam Moazzem, CPD's research director, expressed disappointment with the budget, stating it appeared to be an old budget from a new government.
"From the proposed budget for the upcoming fiscal year, it doesn't seem like this is the budget of a new government. Rather, it seems to me like this is an old budget of a new government," he said.
He criticised the lack of austerity measures in government spending, despite efforts to reduce expenditure in the private sector.
"Where will austerity in government spending be seen?" he questioned.
"Through such government expenditure, the economy cannot be brought back from the crisis to the mainstream. Rather, it will prolong the time to return to the mainstream," he added.
Commenting that this budget could be a major cause of inflation in non-food items, Moazzem said, "VAT has been imposed on many goods and services. Added to this is the announcement of a four-monthly increase in electricity and fuel prices."
He also commented that these issues will trigger inflation.
In the main paper, Fahmida Khatun said, "To achieve a GDP growth of 6.75% and reduce the inflation rate to 6.5%, the budget does not outline ways to ensure the necessary environment for business, trade, and investment."
Although several targets have been set to increase foreign exchange reserves, there are no directives in the budget on how to achieve them, she added.
Commenting that there is discomfort in every area of the economy, she said, "From revenue income to expenditure management, government loans from banks, liquidity crisis, downward growth in exports, depreciation of the exchange rate, etc., various crises must be overcome to achieve the large growth target."
Regarding the government's plan to take large loans from banks to meet the deficit, she said, "If this is done, the flow of loans to the private sector will decrease. Moreover, the pressure to pay higher interest will also increase."
Fahmida Khatun urged to ensure discipline in government expenditure management by bringing efficiency in implementing the Annual Development Programme (ADP).
"Year after year, project implementation is delayed, increasing both the implementation time and costs. As a result, the cost of the services to be provided by the project also increases," she said.
