Budget 2022-23: Economic self-reliance, adequate supply of commodities to be key challenges

Renowned economists and businesses opined that the Russia-Ukraine war, related supply crises, and LDC graduation would be the key challenges to the upcoming budget of the country.

They said production disruptions, supply hindrances, and economic problems related to increasing import costs will have to be identified in the next budget.

Speakers said these at ‘The Business Post’ roundtable discussion on ‘Economic Challenge and the Upcoming Budget for FY23’ held at the ‘Business Post’ auditorium on Saturday.

Besides, internal economic capacity will have to be increased to face the global economic pressure. At a time, increasing government and private investment, creating employment opportunities, and boosting the social safety net along with other facilities need to be addressed in the upcoming budget of the next fiscal year, they said.

A B Mirza Azizul Islam, former finance adviser, caretaker government, was present at the roundtable as the chief guest.

The Business Post Editor Mohammad Golam Sarwar presided over the roundtable while its Executive Editor Nazmul Ahsan moderated the programme.

In his speech, Mirza Azizul Islam said, “The main challenge of the budget is to control the inflation. The global unstable situation is the source of the present inflation. The fuel prices have soared due to the Russian invasion of Ukraine. While inflation creates because of global reasons, it would not be resisted by internal policy. In this case, the next budget should focus on how much safety they can provide to the affected. For this, social safety might be increased. However, needy people are always deprived of the facilities. Opportunists embezzle the social safety fund. This fund is also not adequate. That’s why; allocation in the social safety net should be increased in the next budget.”

Pension should be dropped from the social safety net, he asserted.

He said, every year, the size of the budget becomes small in the revised budget. The capacity of expenditure should be increased as Bangladesh expenses the lowest amount in South Asia.

Mirza Azizul also raised the question about the size and number of the budget.

The senior economist said the amount of expenditure will decrease if revenue does not increase. The tax-GDP ratio in Nepal and India is 22 percent while 15 percent in Pakistan. It should be increased by a 10 percent ratio in Bangladesh.

The government gives pressure on those who submit tax returns regularly although half of the total TIN (Tax Identification Number) holders do not submit a tax return. It should also be investigated, he added.

Mirza Azizul said at present the unemployment rate is more among the educated people. The upcoming budget should address the issue because the investment in the private sector remained stagnant in the last decade. In this case, funding and capital market problems should also be resolved.

Center for Policy Dialogue (CPD) Research Director Khondokar Golam Muazzem said the supply chain system has been disrupted during the post-Covid period. At the same time, expenditure also increased. The economic impact is prevailing in the country for the hike of fuel and its supply due to the Russian-Ukraine war.

At present, the challenge is the ‘balance of payment’. Export increased in the country but the cost of imports is higher than the export amount. Only remittance and foreign loans can level this ratio. The foreign exchange market will remain unstable in the upcoming days. The central bank should take logical measures to stabilize the money market. The price of the dollar is higher in the kerb market. If the central bank does not take action in this regard, remittance through hundi will be increased, he added.

Former chairman of the National Board of Revenue (NBR) Abdul Majid said, “We need to target a three-year rolling system. The ADP has implemented 45 percent in nine months, and the rest in three months. The next budget should have suggestions and the opportunity to introduce changes in this regard.”