Customs duty has been reduced but ...: It is praiseworthy to note that customs duty on essentials like rice, pulses, chilli, turmeric, sugar etc has been reduced. The objective is great but the finance minister himself has commented "Duty reduction is not the only weapon of reduction of prices of essentials, it may not have the due impact on price reduction if graft, profiteering, toll etc cannot be eradicated and control measures of the government for management of stock of food is not improved." Many thanks to the honourable finance minister for realising and confessing the truth. But it is disheartening to note that no measures for the aforementioned goals have been defined in the budget. For the last one year the public have been struggling with price hike of essentials but the Commerce Ministry seems to have failed to control it. It was therefore imperative for the Commerce Ministry to propose dynamic measures in the budget for proper marketing of essentials in the country. Simultaneously the Home Ministry should have suggested steps in the budget and allocation of fund to control and punish syndicated hoarding of essentials by the traders.

Even without studying economics one can say that supply in the market determines the price of commodities demanded. Despite enough supply in the market hoarding is responsible for artificial price hike of commodities. In the past we have observed that whenever there was dearth of supply of an essential in the market, Trading Corporation of Bangldesh (TCB) used to import it immediately and flush it in the market. Since TCB is a government enterprise it needs to earn the minimum or no profit but to ensure supply of essentials in time in the market. In the budget TCB should have been allocated more funds for its working capital and empowered to import directly. The private enterprises would receive allocation from TCB. The poor people of the country won't be able to save any thing, rather they would resort to borrowing if the price of essentials continues to go up. Thus poverty would not reduce.

Allowances for old-age, widows, freedom fighters, disabled persons: Though the finance minister has said that 56.3 per cent of the budgeted revenue would be spent for reduction of poverty directly and indirectly, it is very difficult to trace the details of proposals. It is observed that 4.7 per cent of the revenue has been allocated for the aforementioned sectors under social security and welfare. The total amount under this head would amount of Tk 3,227 crore. In the above-mentioned sectors both rate of allowance and number of beneficiaries have been enhanced in some cases. Nevertheless, poverty will be directly reduced due to this proposal, but measures need to be taken so that the allowances can reach the actual beneficiaries in time. The corrupt officers and agents may try to misappropriate the shares of the poor. The government has to introduce monitoring methods. Allocation of more funds should have been made in this area since it is the only direct method of reduction of poverty.

Direct taxes don't seem balanced: The direct taxes are a major source of revenue which are paid by the assessees of income tax. The assessees earning more income will pay more tax and those earning less income will pay less tax. This is one of the methods of balanced distribution of income and wealth among the citizens. It was hoped that the limit of taxable income would be raised from the present Tk 120,000, but it has been kept as before. Moreover those who pay income tax at 25 per cent (highest slab) will be allowed a tax rebate @ 10 per cent on the income in excess of 10%. For the employees, exemption of tax has been enhanced from Tk 12,000 to Tk 18,000 in respect of travelling allowance only. Exemption limit for house rent allowance has been kept as before despite inflation in house rent.

Houses/flats/apartments dear to income-earners: In certain residential areas, investment tax has been raised to Tk 300 and Tk. 400 per square meter for flats and apartments above 200 sqmt area. Though this enhancement applies to certain areas the impact may spread to other areas as well. Moreover the black money owners will be allowed to purchase these flats, apartments and houses on payment of 7.5 per cent income tax. This concession will raise the prices of these dwelling places and the middle class income-earners will suffer. This will boost disparity between the rich and the poor.

Allocation and subsidy for agriculture: In the budget 7.5 per cent revenue amounting to Tk 5,230 crore has been proposed to be spent for improvement, research and subsidy of agriculture sector. Out of this Tk. 1100 crore will be spent for subsidy to peasants. Over 60 per cent people of the country live on agriculture. A good portion of the GDP is contributed by this sector. If production of food crop falls below target, the deficit is met by importation of food on payment of thousand crores of Taka in foreign currency. High price of seed, diesel, fertilizer etc. has made the cultivation costly. In this situation only subsidy can rescue the peasants and encourage them to resort to farming. Subsidy is also a measure to reduce poverty among the peasants who are, as said, 60 per cent of the population. In the last fiscal year Tk. 1200 crore was provided as subsidy, but it is doubtful if only one third of it had reached the actual needy. This fact was disclosed by the finance minister himself. He indicated that two third portion of it might have been misappropriated by the agents i.e. middlemen and corrupt officials. Despite this fact no proposal as to how the subsidy will be distributed and monitored has been inserted in the current budget. The amount of subsidy too, has been reduced to Tk. 1100 crore. This seems not right.

Whitening of black money: During the last few years the black money owners have been given opportunities to declare their black money in various forms on payment of certain taxes. But the result was disheartening. Consequently the people expected that during this budget whitening of black money will be abolished. But in the budget opportunities still exist in respect of purchases of cars, houses, flats, apartments etc by anybody who will pay tax @ 7.5 per cent. It is social injustice to allow the black money owners to legalise their money on payment of tax at lesser rates as against those who earn income legally and pay taxes at higher rates. Most probably for the same reason, the black money owners feel shy to declare their illegal money. This measure always inflates the gap between the rich and the poor. Moreover, allowing black money owners to purchase houses, flats, apartments which are unproductive areas, will inflate the prices of these items, so the low income earners will not be able to compete with rich. Had the black money been allowed to be invested in productive areas viz. industries, capital market etc., up to a ceiling volume then it would have helped the economy to increase its investment and employment opportunities.

Tourism, software industries, lump sum allocations etc: In many countries of the world (the nearest being India) billions of dollars worth of foreign exchange is earned from tourism and software industries. Our country has not earned even hundreds of thousands of dollars a year. In the budget no allocation has been made for infrastructural development or training of manpower for these industries. Rather some lump sum allocations without proper details amounting to Tk. 4,602 crore has been made in the budget inviting questions from public as how this sum will be spent. In a national budget this type of allocations are always considered unjustified.

Ali Idris FCA is a freelance contributor.