The parliament is humming with budget discussion. The pros and cons of the budget, placed the Finance Minister on June 05, 2014, are also being discussed in various forums everyday. In fact, there are various aspects of the budget which really deserve serious examination.
If the rational suggestions placed in and outside parliament are taken into consideration by the Finance Minister, the budget must conform to ground realities.
The estimates in expenditure and financing thereof have given rise to criticisms in informed quarters. The research organisation CPD (Centre for Policy Dialogue) has termed the budget for FY 2014-15, as 'objective seeking', with no prioritisaton.
Among others, an important lapse found over last two fiscals was in ignoring the necessity of political stability. It is not that the Finance Minister did not call for political stability, but he accused the major opposition party or alliance and made an appeal to it not to indulge in political violence so that the country can progress economically.
In his budget speech titled, "Progress uninterrupted: A Promising Future Beckons Bangladesh", the Finance Minister highlighted the issue of political instability that led to the revision of budget for FY 2013-14. To quote the Finance Ministry, "I would like to reflect on the adjustments and revision in the budget for FY 2013-14. In the run-up to the 10th national election there had been a serious political unrest in the first six months of the current financial year. Various political parties and alliances observed a total of 45 days of hartal and blockade during July 2013 to January 2014. These hartals and blockades were not limited to 12 or 24 hours, rather at times even continued for a week. Communication was disrupted, port activities came to a halt, retail and wholesale buying-selling came down to almost zero, which had a debilitating effect on government revenue collection. Frenzied destruction of government properties was another salient feature of these hartals and blockades. The main targets of attack were Railway, government and non-government transports. Government offices and educational institutions were not spared either. Along side the mass destruction of properties there had been a number of death incidents as well. According to the World Bank, this political vandalism caused loss of Tk. 11,000 crore in the national economy which is around 1.0 per cent of GDP (gross domestic product)''.
All these led to fall in revenue collection, budget deficit and slow implementation of the annual development programme (ADP).
The Finance Minister further added, "Smooth implementation of revised budget will depend to a great extent, on stable political situation that is prevailing after the election held on 5th January. I would like to call upon everyone through this august House: Let us resist collectively all nefarious activities that damage the economy of the country''.
The Finance Minister has his limitations. But the fact remains that an investment- or a business-friendly environment cannot be achieved without commitment of political parties. The investors want safety of life and protection of their investment.
There is no denying the fact that without required investment, industrialisation cannot take place and for that matter higher growth cannot be achieved. The share of investment in GDP should be more than 30 per cent to achieve around 7.0 per cent growth. But the Finance Minister did not present a clear roadmap to achieve it.
There is an alternative version of consumption-led growth. It may be true for an economy of 'high mass consumption' of Rostow which has a hi-tech and advance capital base. In such a situation also, there should always be a balancing interplay of investment and consumption-led growth models. One should have employment and money to make consumption expenditure. There is no alternative to capital formation and industrialisation in Bangladesh for providing employment to about 2.0 million new entrants to labour market every year. There is no scope to continue the wait-and-see attitude for all the stakeholders including the investors. A participatory and inclusive election, along with a healthy law and order situation, will lead Bangladesh to the cherished goal of economic development.
The writer is an economist and former Planning Secretary. chowdhuryjafar@ymail.com
