Without legitimacy and public accountability budget means only hardship

When the government lacks popular legitimacy and is in the midst of political uncertainty mere setting bold targets and uttering high sounding promises of growth are bound to prove bureaucratic jugglery and empty hopes. The government will be hard on the people for collecting taxes in all possible way. Growth does not happen from budgetary expressions but from political legitimacy and political stability. It is one thing to obtain promises of foreign loans and another to get the money. Besides borrowing money without ability to create growth friendly atmosphere is a show exercise. The government showed efficiency in engineering voter less election for the government to continue in power. Two other areas of success are growth of corruption and spread of lawlessness. These are not the conditions for successful implementation of any ambitious budget. Unless one is uncertain about whose budget for whose good. Finance Minister AMA Muhith has set a good target and strategy to reach over 7 percent growth next year and 10 percent by 2021. His ambitions are bold – to hike industry’s share in national growth to 40 percent from 25 percent, to move big projects in public-private partnership, and to squeeze out more revenue. However, the Finance Minister has tried to do his best in many areas, industry being one. He has encouraged a decentralization of industries with special benefits. The budget means to help a number of key sectors, including pharmaceuticals, shipbuilding, tyres, poultry, textiles and above all readymade garments.But his growth target of 7.3 percent for next year will certainly fall flat. According to the Bangladesh Bureau of Statistics, one needs Tk 4.7 investment for every Tk 1 output. At this configuration, a 7.3 percent growth will need a 34 percent GDP-investment ratio. With the current 29 percent, it means a 5-percentage point improvement. Such an increase is unprecedented. The Tk 2,50,506 crore-budget hinges on an ambitious revenue target, putting a question mark on its feasibility. The revenue generation target has been set at Tk 182,954 crore, an increase of 16.77 percent from the outgoing year’s revised target. The proposed budget has set an overall deficit of Tk 67,552 crore, of which net foreign financing would be Tk 24,275 crore and domestic financing Tk 43,277 crore. Banks will be a major source to finance budget deficit, and the government has set the borrowing target at Tk 31,221 crore .Unfortunately bold dreams and ambitions fall flat when faced with reality – and in this case the reality is rather dire. It will be extremely difficult to increase the GDP-investment ratio in this situation of uncertainty caused by the political situation. It will be even more difficult for the revenue targets to be met despite the taxes on the super-rich. While he has targeted the extreme poor with Tk 1500 crore in government support one wonders whether the amounts will actually benefit those who are actually poor and not go to those not in need.The proposed budget looks at growth from a long list of mega projects. But how many of those projects will come through and at what implementation rate is a huge question. There are areas where the Finance Minister has remained rather vague. For example, he has not said anything new about physical infrastructure, planned urbanization or overseas employment. A lack of specifics makes one wonder whether these vital issues will be addressed in their proper importance.What the Finance Minister has to remember is that small can be beautiful — one does not need increasingly huge budgets to attain economic growth – what the nation needs is that the amounts spent are spent efficiently — a budget half this size where every taka is efficiently spent and not wasted is more important than one where only 50 percent of the amount spent is efficiently utilized. It is our firm belief that our citizens would rush to pay their taxes if they knew that they were being properly utilized — they could send their children to proper schools and colleges, they could get easy access to parks and playgrounds, they could use roads which do not need to be dug up and rebuilt every year at a huge public expense. Public money should be held sacred — this single concept, if applied, would increase our tax revenues manifold. Unfortunately we spend money on the whims of our public servants who don’t worry about how difficult it was to enable us to pay taxes in the first place.