Bangladesh Economic Association (BEA) on Sunday placed an alternative national budget of Tk 20.50 trillion, which is more than three times higher than the national budget amount likely to be proposed for the upcoming fiscal year (FY 2022-23).
The platform of local economists estimated the revenue collection target at Tk 18.70 trillion to finance the alternative budget expenditure while the remaining part of Tk 1.80 trillion would be the deficit.
The deficit would be financed not from external debt, but with loans from local banks and financial institutions as well as issuing bonds and other financial derivatives in the stock market, it said.
It also suggested imposing wealth tax, mounting tax rates for the ultra-rich, confiscating undisclosed money, and recovering laundered money to increase overall revenue collection.
BEA President Prof Dr Abul Barkat presented the alternative budget at a press conference at the association's Eskaton auditorium in the capital.
Presenting the major features of the budget, he said 77 per cent of the revenue target would come from direct taxes and the rest from indirect taxes and loans from the local sources.
Terming undisclosed money to be a key source of alternative budget, he said the cumulative volume of black money generated in the last 46 years from FY 1972-73 to FY 2018-19 was estimated at Tk 88.61 trillion.
"We propose to recover 2.0 per cent or Tk 1.77 trillion of the undisclosed money for FY '23," said Dr Barkat.
Simultaneously, he said, more than Tk 7.98 trillion were laundered from the country and the association firmly believes that 10 per cent (Tk 798 billion) of the laundered money can be brought back here.
The economist proposed imposing wealth tax to collect over Tk 2.10 trillion in revenue to meet the alternative budget expenditure.
Besides, he suggested imposing tax on excessive profit to collect an additional Tk 750 billion in revenue.
In terms of allocations, the proposed alternative budget gave highest priority to social protection and public welfare (21.4 per cent of the budget), education and technology (11.8 per cent), agriculture (9.0 per cent), public administration (8.2 per cent) and health (7.7 per cent).
Putting emphasis on broadening the coverage of Social Safety Net Programmes (SSNPs), he said that in the pre-Covid era, at least 20 million people were eligible for getting support under the SSNPs, but only 25 per cent of them were served.
To meet the budget deficit, Mr Barkat strongly opposed the government's dependence on foreign loans and suggested raising funds from local sources like stock and bond markets, banks and financial institutions, and other sources.
He also expressed his position in favour of taxing foreign nationals to add an additional Tk 85 billion to the state coffer.
Responding to a question over the upward trend of borrowing from external sources, the economist the government statistics about debt to GDP ratio is not realistic in any country.
In terms of debt servicing, the country is still in the green line but it is likely to fall in the red zone starting from 2027-28 when the country would start repaying the loans taken against several mega projects, he said.
"So, don't take any more mega projects and don't delay in executing the existing ones," he said, suggesting 'hard thought' regarding the debt-servicing management with the people having sound knowledge about the matter.
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