A probe into the proposed budget: philanthropy versus judiciousness
Niaz Ahmed Khan | Sunday, 22 June 2008
THERE have been considerable debate and discussions on the proposed budget for fiscal 2008-09. This budget has a number of distinctive features which have attracted attention from various quarters.
Firstly, in terms of the financial portfolio, this has been the country's largest budget with an estimated expenditure plan worth about Taka one trillion.
Secondly, it proffers an extensive range of financial incentives to varied disadvantaged sections of the society (targeting, for example, working mothers, public sector staff, unemployed youths, the elderly, and the disabled). About half (50%) the estimated expenditure would account for meeting costs of such direct social security benefits in the forms of governmental subsidies, wages and salaries, and loan repayments.
Thirdly, the budget is also burdened with a staggering deficit of some Taka 305.80 billion (30580 crores). The Annual Development Programme (ADP) accounts for only Tk 256.6 billion (25600 crore) just 25 per cent of the total budget. Put differently, this also means that the bulk amount of the proposed budgetary allocations would be spent on unproductive heads.
In all these activities and features, analysts see an underlying 'charitable' or 'philanthropic' approach -- without, however, much thought given the far-reaching future implications. This has been the second budget under the aegis and administration of the current caretaker government.
The government is presently wading through a number of major challenges such as rocketing of prices of essential commodities, and the resultant burden on common citizens' daily life and living; an spell of uncertainly in the political arena with faltered attempts towards the dialogue and negotiation; disturbances in the macroeconomic framework including an overshoot in inflation and public borrowing; and a gradually discernible indication of covert unrest and dissatisfaction amongst general members of the public.
On a closer look into the proposed budget, one may wonder and argue that the efforts to pacify various sections of the population are clearly noticeable in the budget's overtly generous approach to public expending on non-development (essentially unproductive) heads. There is hardly any indication of a long term vision or direction of the political economy in the proposed budget. A contingency approach is manifested, and 'adhoc-ism' seems to be the overarching tone of the whole budget exercise. The unproductive public spending may contribute to yet another round of hike in the inflation rate.
Can our feeble economy bear the burden of one of the largest budget deficit? Who would guarantee that the efforts to widen the net of indirect taxes will not ultimately burden the common citizens like us? Might it not be the case that the government's overt generosity would ultimately boomerang, and come back to haunt us in the long run? Who can give us some comfort by answering these rather uncomfortable questions and concerns?
As noted earlier, the budget visibly lacks any long-term vision or strategic direction in terms of stabilisation of the macro-economy and societal dynamics. As an example, let us turn our attention to the budget's treatment of the crucially important environmental sector. The salience and strategic significance of this sector can hardly be overemphasised. However, the budget seems to be completely oblivious of this sector. In the long budget narrative, consisting of some 172 articles, the word 'environment' is not be seen anywhere. The only cursory reference is found in the 100th article, where the issues of 'global worming' and 'use of bio-fuel' are superficially mentioned in relation to the discussion on food security and management.
The budget remains oddly silent regarding such environmental issues of national salience as promotion of 'green belt' in the off-shore and coastal areas, provision of adequate number of cyclone shelters; pollution control, support to sound urban planning; considerations of habitat restoration for the country's endangered flora and fauna; provision of agricultural and irrigation infrastructure; and the like.
The proposed budget does have a humane and philanthropic tone. There are reasons and occasions for common citizens like us to be happy with selected budgetary provisions, especially the social security measures. However, the happiness may at best be temporary and transient - at the cost of discounting the future. After this brief honey-mooning, we might have to face up with the hard realities in the coming future. Overall, it appears that philanthropy and public appeasement have prevailed over strategic direction and judicious macroeconomic prescription under this proposed budget.
The writer is Professor of Development Studies at the University of Dhaka, Bangladesh and Honorary Research Fellow, Centre for Development Studies, University of Wales, UK. He can be contacted at: niaz.khan@yahoo.com
Firstly, in terms of the financial portfolio, this has been the country's largest budget with an estimated expenditure plan worth about Taka one trillion.
Secondly, it proffers an extensive range of financial incentives to varied disadvantaged sections of the society (targeting, for example, working mothers, public sector staff, unemployed youths, the elderly, and the disabled). About half (50%) the estimated expenditure would account for meeting costs of such direct social security benefits in the forms of governmental subsidies, wages and salaries, and loan repayments.
Thirdly, the budget is also burdened with a staggering deficit of some Taka 305.80 billion (30580 crores). The Annual Development Programme (ADP) accounts for only Tk 256.6 billion (25600 crore) just 25 per cent of the total budget. Put differently, this also means that the bulk amount of the proposed budgetary allocations would be spent on unproductive heads.
In all these activities and features, analysts see an underlying 'charitable' or 'philanthropic' approach -- without, however, much thought given the far-reaching future implications. This has been the second budget under the aegis and administration of the current caretaker government.
The government is presently wading through a number of major challenges such as rocketing of prices of essential commodities, and the resultant burden on common citizens' daily life and living; an spell of uncertainly in the political arena with faltered attempts towards the dialogue and negotiation; disturbances in the macroeconomic framework including an overshoot in inflation and public borrowing; and a gradually discernible indication of covert unrest and dissatisfaction amongst general members of the public.
On a closer look into the proposed budget, one may wonder and argue that the efforts to pacify various sections of the population are clearly noticeable in the budget's overtly generous approach to public expending on non-development (essentially unproductive) heads. There is hardly any indication of a long term vision or direction of the political economy in the proposed budget. A contingency approach is manifested, and 'adhoc-ism' seems to be the overarching tone of the whole budget exercise. The unproductive public spending may contribute to yet another round of hike in the inflation rate.
Can our feeble economy bear the burden of one of the largest budget deficit? Who would guarantee that the efforts to widen the net of indirect taxes will not ultimately burden the common citizens like us? Might it not be the case that the government's overt generosity would ultimately boomerang, and come back to haunt us in the long run? Who can give us some comfort by answering these rather uncomfortable questions and concerns?
As noted earlier, the budget visibly lacks any long-term vision or strategic direction in terms of stabilisation of the macro-economy and societal dynamics. As an example, let us turn our attention to the budget's treatment of the crucially important environmental sector. The salience and strategic significance of this sector can hardly be overemphasised. However, the budget seems to be completely oblivious of this sector. In the long budget narrative, consisting of some 172 articles, the word 'environment' is not be seen anywhere. The only cursory reference is found in the 100th article, where the issues of 'global worming' and 'use of bio-fuel' are superficially mentioned in relation to the discussion on food security and management.
The budget remains oddly silent regarding such environmental issues of national salience as promotion of 'green belt' in the off-shore and coastal areas, provision of adequate number of cyclone shelters; pollution control, support to sound urban planning; considerations of habitat restoration for the country's endangered flora and fauna; provision of agricultural and irrigation infrastructure; and the like.
The proposed budget does have a humane and philanthropic tone. There are reasons and occasions for common citizens like us to be happy with selected budgetary provisions, especially the social security measures. However, the happiness may at best be temporary and transient - at the cost of discounting the future. After this brief honey-mooning, we might have to face up with the hard realities in the coming future. Overall, it appears that philanthropy and public appeasement have prevailed over strategic direction and judicious macroeconomic prescription under this proposed budget.
The writer is Professor of Development Studies at the University of Dhaka, Bangladesh and Honorary Research Fellow, Centre for Development Studies, University of Wales, UK. He can be contacted at: niaz.khan@yahoo.com