Former Bangladesh Bank Governor Dr. Atiur Rahman termed the proposed budget as a pragmatic one that targets to overcome challenges arising out of accentuating supply chain disruptions due to the Ukraine war at the back of pandemic recovery.

The eminent economist thinks the focused attention on increased allocations for agriculture and consequent food security in a volatile world has indeed been a highly prudent move.

“Indeed, our robust agriculture has not only been the ultimate safeguard of our economy in the difficult days of the covid-19 pandemic but also continues to remain a source of employment plus robust domestic consumption and demand,” Dr. Atiur Rahman told the Daily Sun.
Dr Atiur said the government has been substituting the import of food and thus helping the stability of our foreign exchange reserve with enhanced agricultural production.

The budget also provides extra incentives to the digital entrepreneurs by reducing taxes for the start-ups which will go a long way in taking the country to fetch five billion of dollars worth of exports from digital products and services, according to the visionary economist.

The former governor appreciated the decision to do a feasibility study on digital central bank currency as a welcome move.

“We have gone a long way in promoting mobile banking and internet banking to go for a cashless society. This will further boost that journey. However, the increased five percent tax on broadband services and on the retail sales of mobile sets will increase the cost of digital services leading to a further digital divide,” added Dr. Atiur.

He said the post-pandemic recovery in fact expected more support for digital transformation.

“Almost all people in Bangladesh, including those at the bottom of the pyramid, use mobile phones. So this will add to their woes in this difficult year of inflation. I would strongly recommend rethinking this VAT proposal. The younger generations will get the wrong signal from this. The education sector will also get a hit from this,” said Dr. Atiur, executive chairman of Unnayan Shamannay.

He said the continued support for the export industries including zero taxation on homegrown shipping industries will help reduce freight charges for the RMGs and other exports.

Dr. Atiur appreciated the decision to launch the universal pension scheme as a smart move.

“The legal framework for developing a regulatory authority as promised in the budget will set in motion this much-awaited pension scheme for all. There are many systems in place. We must take lessons from those and start our own homegrown scheme,” he said.

The development economist further appreciated the increased taxation on tobacco products and enhanced allocations for the education sector are also welcome moves.

“Further enhancement of taxation on the luxury products will help reduce import bills and reduce the trade deficit. It will also provide indirect benefits to the import substitution industries for many of these products like home appliances and durables used by middle and advanced consumer groups,” he said.

Dr. Atiur said the favors given to those who were involved in the flight of capital, though a desperate move by the government to get more foreign exchange, may be questioned by the observers on ethical grounds and as well as a source of disincentive for the usual taxpayers who are going by books.

The government has rolled out a Tk 6.78 trillion spending plan with the aim of bringing Bangladesh back on the path to development.

Source: Daily Sun