AN ANALYSIS ON BUDGET 2023-2024
Action Research prepared by
Professor Syed Ahsanul Alam Parvez
National Chairman, NBER
A NBER Research
AN ANALYSIS ON BUDGET 2023-2024
CONTENTS
1. SIZE OF BUDGET
a. Increase From Budget of FY 2022-2023
b. Budget Deficit in Comparison with Budget of FY 2022-2023 In Amount and Percentage
c. How Does Government Plan to Cover the Deficit?
d. Expected GDP Growth of Budget of FY 2023-2024
e. Expected and achieved GDP growth rate of FY 2023-2024
2. CURRENT BUDGET FY2023-2024- INFLATIONARY SCENARIO
a. Estimated Inflation Rate in The Current Budget
b. Estimated And Actual Inflation of FY 2022-2023
c. How Does Government Plan to Contain Inflation in Current FY 2023-2024
3. CURRENT BUDGET FY 2023-2024-COMMODITY PRICE SCENARIO
a. Price To Increase
b. Price To Decrease
4. CURRENT BUDGET FY 2023-2024-INCOME TAX POLICY SCENARIO
a. Individual Tax Structure
b. Defect of the IT Policy
5. THE GOLD STORY AND ITS IMPACT ON ECONOMY
6. CURRENT BUDGET FY 2023-2024-TANSPORTATION SECTOR SCENARIO
a. Impact Of Increased Tax on Petrol and Octan
b. Impact Of Increased Tax in Domestic and International Flights
c. Increased In Travel Tax
d. Increased In Vehicle Documentation Cost
7. INADEQUATE BUDGET FOR EVERY SECTOR
a. Sector-Wise Allocation
b. Allocation Is Not Increased for Health Sector
8. BUDGET WILL INCREASE RICH AND POOR GAP
9. CONCLUDING REMARK
REFERENCE
CHAPTER-01-SIZE OF THE BUDGET:
a. Increase from last year’s budget
The total size of national budget 2023-24 is likely to be Tk 7.60 trillion (760,000 crore). Finance minister
AHM Mustafa Kamal will begin presenting the budget in parliament at 3:00 pm on Thursday. He named
the budget speech for the fiscal 2023-24 as "UnnaynerAgrayatraPeriye Smart BangladesherAbhimukhe"
(Towards a Smart Bangladesh after the march of development). He will highlight developing smart
citizens, smart economy, smart government and smart society.
The target of income in the budget would be Tk 5 trillion (500,000 crore). Of the amount, the target of
income of National Board of Revenue (NBR) will be Tk 4.3 trillion. The deficit in the budget will be more
than Tk 2.5 trillion. The GDP growth target in the upcoming budget would be 7.5 per cent while the
inflation rate would be 6.5 per cent. (1)
The size of the budget has increased 9-fold to Tk 7,61,785 crore (proposed) in FY2023-24 from Tk 79,614
crore in FY2007-08.
Budget allocation in the social sector experienced a 9-fold increase from Tk 13,845 crore in FY2009-10 to
Tk 1,26,272 crore in FY2023-24 (2)
b. Budget deficit scenario
The imbalance between expenditure and revenue is a regular phenomenon in Bangladesh, which leads
the government to borrow both from domestic and foreign sources. For a long time, the economy
maintained its budget deficit at below five percent. In the revised budget of FY2022-23, the deficit was
5.1 percent of GDP, and the FY2023-24 budget proposes it to be 5.2 percent of GDP. (3)
c. How govt. plan to cover the deficit
Of the total deficit, it is proposed to finance Tk 1 lakh 40 thousand 425 crore from internal sources and
the remaining Tk 83 thousand 819 crore from foreign sources.
Tax exemption is one of the major obstacles to improve the tax to GDP ratio. Instead of giving tax
exemptions, on each case, whether it is project implementation or maintenance work or purchase of
essential commodities, the required amount1 of tax (VAT, import duty, supplementary duty or income
tax to be paid) should be allocated in the budget of the related office and required taxes should be paid
from that budgetary allocation. Special orders for exemptions should not be issued unless there is an
extraordinary situation. This will bring transparency in revenue administration and help to manage
budget deficit better.
New sectors of revenue collection will be focused on to ensure an adequate supply of resources. The
dependence on external debt will be reduced gradually to address the budget deficit.
What is worrying is that a big part of this deficit will be financed with resources from the banking
system. The government borrowed from the banking system much more in the outgoing fiscal year than
what was projected in the budget originally. It was more disturbing that the government borrowed high-
powered money from Bangladesh Bank this fiscal year.
With limited resources for development spending, low tax-GDP ratio, and the commitment to the
International Monetary Fund (IMF) to increase revenue mobilization by Tk 65,000 crore, the finance
minister has resorted to desperate measures to generate higher revenues in the proposed budget.
Hence, even though the revenue shortfall in the current fiscal year was high till February 2023, and
indeed the growth during July-February of FY2023 has been (-) one percent lower than the same period
in FY2022, the target for FY2024 has been set at 10 percent of GDP. Achieving this growth will be
challenging, given the trend of not being able to meet revenue targets over the last several decades.
In order to achieve this target, it is crucial for the authorities to address the larger issues of expanding
the tax net, exploring new sources of tax, reducing tax evasion, modernizing the National Board of
Revenue (NBR), and implementing e-governance. Higher revenue collection is not possible if the focus is
primarily on targeting individuals and sectors that are already within the tax system. The NBR earlier
identified new areas and sectors outside the existing tax net. This exercise has to be implemented
through unpopular measures. As more individuals and institutions come under the purview of the tax
department, tax revenue will naturally increase. (4)
d. Expected GDP growth rate in budget 23-24
In the proposed budget, Finance Minister AHM Mustafa Kamal has set the country's GDP (gross
domestic product) growth target at 7.5 per cent for the coming fiscal year 2023-24.
“On the whole, we expect to return to higher growth trajectory and achieve a 7.5 percent GDP growth in
the coming fiscal year, by way of investing in the productive sectors and stimulating productivity and
domestic demand,” he said during the budget speech in parliament on Thursday.
“To achieve the growth target, we will gradually come out of the contractionary policy and invest in
ongoing and new growth-inducing projects including the mega-projects. For this purpose, the budget of
the next fiscal year has set a higher target of raising the public investment to 6.3 percent of the GDP.
“At the same time, investment will continue to be facilitated in economic zones with an investment-
friendly environment consisting of various facilities such as undisputed land, improved infrastructure,
uninterrupted utilities, financial incentives and ease of doing business, etc.” (5)
e. Expected and achieved GDP growth rate in FY 22-23
Bangladesh’s Gross Domestic Product, or GDP, has grown by 6.03 percent in the ongoing 2022-23 fiscal
year, according to State Minister for Planning Dr Shamsul Alam.The slower than forecast growth rate
was shared by the state minister at a press conference following a meeting of the National Economic
Council to approve the Annual Development Programme for the coming fiscal year on Thursday in Sher-
e-Bangla Nagar.The final estimates for FY2021-22 put Bangladesh’s GDP growth at 7.1 percent. This
means the growth rate has dipped by over 1 percentage point year-on-year. (6)
According to a popular European Think Tank, Spectator Index, Bangladesh has achieved 188 percent
GDP growth and topped the list of countries during the 10 years (2009 to 2019) of pre-COVID.
Bangladesh achieved GDP growth of 3.45 percent during COVID pandemic, when most of the countries
experienced negative growth. And within the short period of time, immediately after the COVID year,
the economy returned to the course of higher growth. In FY2020-21 Bangladesh achieved the GDP
growth of 6.94 percent and in FY2021-22 it stood at 7.10 percent. (7)
CHAPTER-02-CURRENT BUDGET FY2023-2024- INFLATIONARY SCENARIO
a. Estimated inflation rate the current FY 2023-2024
Bangladesh is targeting an average inflation rate of 6 per cent in the coming fiscal year amid volatility in
the global market, the rise in fuel prices and subsidy cuts required by the International Monetary Fund
loan deal.
“Due to the decrease in the prices of fuel, food, and fertilizer in the global market, along with the
adjustment of fuel prices in the domestic market and government initiatives to keep the food and supply
systems normal, the inflation will remain much controlled in the next fiscal year and the annual average
inflation is expected to stand at around 6.0 per cent,” he said in his budget speech on 1 st June 2023.
The average inflation target for FY 23 was set at 5.6 per cent in the outgoing fiscal year, but it was
changed to 6 per cent in revisions. Amid global economic uncertainty and runaway prices, the
government still overshot the mark. (8)
b. Estimated and actual inflation of FY 2022-2023
Estimated inflation for FY 2022-2023 was 5.6%
The last fiscal year, the average inflation was 6.15 per cent. Although the inflation increased due to the
Russia-Ukraine war, the government has been making an all-out effort to check inflation and mitigate its
impact on the people, Kamal said in the budget speech. (9)
Bangladesh Inflation Rate
Source-https://tradingeconomics.com/bangladesh/inflation-cpi
The government increased gas prices for industrial units and power producers on Jan 18. Thereafter,
power prices were hiked thrice between Jan 31 and Feb 28, each time by an average of 5 percent at the
retail level, directly raising the prices of essential goods.
The Bangladesh Bureau of Statistics used to count the average inflation rate based on the prices of 422
products. The state-run agency added around 300 more products to the list following the instructions
from the IMF.
The country’s inflation rate reached 9.52 per cent in August last year, the highest in a decade. The rate
dropped to 8 per cent in January and February but it increased to 9.33 per cent again in March. The rate
eased marginally to 9.24 per cent in April.
The rate of inflation was 12.3 percent in FY2007-08. Despite intermittent global economic recession, in
the last 14 years rise in food and fuel prices in the world markets, the government was able to keep the
inflation in check. In FY2021-22, average inflation was within 6.75 percent. Even in the last fiscal year,
the average inflation was 6.15 percent. Although the inflation increased due to the Russia-Ukraine war,
the government has been making an all-out effort to check the inflation and mitigate its impact on the
people. (op.cit.8)
c. How does government plan to contain inflation?
To deal with the situation, the government is implementing some austerity measures in other areas in
the current fiscal year while continuing to prioritize spending on projects related to public welfare and
supply sectors. To keep the production of the agricultural sector uninterrupted, the government has
taken quick and effective steps to ensure the supply of fertilizers at affordable prices. Besides, allocation
on subsidy for electricity and gas has been enhanced. Alongside, Bangladesh Bank has increased the
policy interest rate i.e. repo rate several times to control inflation. Moreover, customs duty on rice
prices has been withdrawn and regulatory duty has been reduced from 25 to 10 percent. Advance tax
exemption has been allowed and duty on diesel has been reduced from 10 percent to 5 percent to
reduce the price of diesel. To control inflation and to mitigate the impact of inflation on low income
people, the government has been carrying out programs like food-friendly program, open market sale of
rice, distribution of 1 crore family cards and so on. (op.cit.3)
CHAPTER-03-CURRENT BUDGET FY 2023-2024-COMMODITY PRICE SCENARIO
a. Price to increase or decrease:
Source:https://www.thedailystar.net/special-events/national-budget-2023-24/news/what-gets-costlier-
what-gets-cheaper-3335541
Price may increase for LPG cylinder, Locally-made mobile phones, High-end cars, Software (imported),
Land Purchasing, Gold, Plastic kitchenware and tableware, Cigarettes, Microwave oven, Elevators,
Escalators, Tissue paper, Pens, Spectacles, Cashew nut, Dates (dry), Basmati rice etc.
A Proposal can be made to impose VAT at the manufacturing level of mobile phones in the local
companies. Companies that would manufacture machinery, equipment and also manufacture
mobile phones may have to pay 3 per cent VAT. Companies engaged in the production of at least
two mobile phone parts will be required to pay a 5 per cent VAT, whereas the previous rate stood at
3 per cent. Meanwhile, entities involved in importing all the parts and conducting assembly within
the country will be subjected to an increased VAT rate of 7.5 per cent, up from the previous 5 per
cent. Consequently, the local market may witness a possible escalation in smartphone prices as a
result of these revised VAT rates.
On the other hand, VAT may be levied and increased at the manufacturing stage of some products.
For example, 5 per cent VAT on pens may be proposed. Additionally, VAT rates at the production
level for household items such as tissues, napkins, plastic tableware, and kitchenware may be raised
from existing 5 per cent to 7.5 per cent. Moreover, supplementary duty rates on imported fans
might see an increase.
Apart from this, it may be proposed to increase the price and duty of all types of cigarettes. On the
other hand, tax rate may be increased by 1 per cent to 3 per cent for the cigarette companies that
pay turnover tax.
For importing bicycle parts, a 15 per cent tariff can be imposed under local industry protection.
Apart from this, the import duty may be increased from 5 per cent to 25 per cent for importing
computer software. This can have a positive impact on the local market.
Similarly, supplementary duty may be increased for import of refrigerators.
Price may decrease for Locally-made cancer, diabetes medicines, imported agricultural machinery,
Pesticides, Spray machine, imported fish, poultry feed, imported airplane parts, Sweets, Handmade
biscuits, locally-made juicers, Raw material for diapers, sanitary napkins, shampoo, soap etc.VAT
exemption for local fridge-refrigerator manufacturers will continue. (10)
CHAPTER-04-CURRENT BUDGET FY 2023-2024-INCOME TAX POLICY SCENARIO
a. Individual tax structure:
the tax authority in the outgoing fiscal year made changes to its tax credit rule on investment that
benefited higher-income individuals and put more burden on low-income taxpayers.
In the next fiscal year, the government is likely to raise the tax-exempt annual earning ceiling to Tk 3.5
lakh from Tk 3 lakh. This is likely to give some level of comfort to people of limited income amid soaring
cost of living. (op.cit.3)
Tax exempted income Tax exempted income
Current 2022-23
Proposed 2023-2024
General tax payer Tk. 3 lakhs Tk. 3 lakhs and 50
thousand
Women and Senior citizen above
65 years age
Tk. 3 lakhs and 50 thousand Tk. 4 lakhs
Physically Challenged persons
Tk. 4 lakhs and 50 thousand
Tk. 4 lakhs and 75 thousand
War-wounded gazette freedom
fighter
Tk. 4 lakhs and 75 thousand Tk. 5 lakhs
Third gender tax payers Tk. 3 lakhs and 50
thousand
Tk. 4 lakhs and 75
thousand
The income tax-free threshold would be increased for parents or legal guardians of physically
challenged child or dependent by Tk. 50 thousand for each child/ dependent.
Current Tax slabs 2022-
23
Current Tax rate 2022-
23
Proposed Tax slabs
2023-2024
Proposed tax rate
2023-2024
Up to Nill Up to Tk Nill
Tk. 3,00,000/-Next Tk. 5% Tk. 3,50,000/-Next 5%
Tk. 1,00,000/-Next 10% Tk. 1,00,000/-Next 10%
Tk. 3,00,000/-Next 15% Tk. 3,00,000/-Next 15%
Tk. 4,00,000/-Next 20% Tk. 4,00,000/-Next 20%
Tk. 5,00,000/- 25% Tk. 5,00,000/- 25%
On balance On balance
b. Defect of IT policy:
As per the proposed budget, registered taxpayers, who have to file their income, expenditure and
wealth statements, to avail 38 services will need to pay a minimum tax of Tk 2,000 even if they earn less
than Tk 3.5 lakh in a year.
This means a large portion of the population, including pensioners and homemakers, will have to pay
the minimum tax despite earning less than Tk 3.5 lakh a year.
These proposals are being put forth at a time of elevated inflation, which averaged 8.85 percent in the
first 10 months of the fiscal year.
A tax-exempt income limit of Tk 3.5 lakh and a minimum tax on individuals are contradictory, said
Snehasish Barua, partner of a chartered accountancy firm.
A tax-exempt income limit of Tk 3.5 lakh and a minimum tax of Tk 2,000 on individuals are
contradictory.
— Snehasish Barua partner of a chartered accountancy firm
As per the National Board of Revenue rules, people must submit a statement of income and expenditure
to borrow over Tk 5 lakh from a financial institution, maintain credit cards, open a postal savings
account of over Tk 5 lakh, and purchase a savings certificate of more than Tk 5 lakh.People who open
and continue using bank accounts of any sort with a credit balance of over Tk 10 lakh will also need to
pay the minimum tax.
The minimum tax will be a burden for low-income people and it contradicts the concept of tax-free
income, said Muntaseer Kamal, a research fellow at the Centre for Policy Dialogue.
People already have to spend money while submitting the income and expenditure statements because
they have to hire someone to handle the complicated paperwork, he said.
He, however, welcomed the decision to raise the annual tax-free income threshold. "This will provide
some much-needed comfort to the low- and limited-income people amid the soaring prices of
essentials."
The government should rather raise taxes for the highest earners. "It must be remembered that this rate
was lowered to 25 percent from 30 percent in 2021… Doing this will promote the cause of tax equity." (11)
CHAPTER-05-THE GOLD STORY AND ITS IMPACT ON ECONOMY
The government proposed going for making the Baggage Rules 2016 stricter, lower the limit for the
travelers in case of bringing in gold bar or gold pieces and impose higher taxes.
Moreover, it also proposed ensuring punishment if the passengers carry gold or silver without making
prior announcement.Earlier, a passenger was allowed to bring gold bars or gold pieces weighing 234
grammes on arrival from abroad subject to payment of all duties and taxes.
Now it is reduced to 117 grammes.
Presently, under Baggage Rules, there is a provision to import gold bars or gold pieces by passenger on
arrival from abroad subject to payment of a total duty of Tk 2,000 for every 11.664 grammes of gold.In
the budget for the next financial year of 2023-24, the amount of this duty has been proposed to be Tk
4,000 for every 11.664 grammes of gold.
Earlier, the provision of punishment for carrying gold bars or gold pieces or silver bars or silver pieces in
excess of the prescribed amount was not clearly defined.Now, the government proposed to add it in the
existing rules so that anyone bringing any quantity of gold bar or gold piece or silver bar or silver piece in
excess of the stipulated amount, then the valuables shall be liable to confiscation in accordance with the
Customs Act, 1969. (12)
CHAPTER-06-CURRENT BUDGET FY 2023-2024-TANSPORTATION SECTOR SCENARIO
Allocation: For transportation sector A Total of Tk. 87,629 crore in the budget for the FY2023- 24, which
was Tk. 81,519 crore in the FY2022-23.
a. Impact of high tax on petroleum product and octan :
While the price of petroleum and its by-products fluctuatesregularly in the international market,
ensuring energy security isalso a top priority of the government. Therefore, it is proposed tocancel the
tariff value and minimum value of 13 products relatedto petroleum and its by-products and impose
specific customs dutyin the budget.In order to determine the appropriate price of the imported
products, in the notification regarding determination of the tariff price and minimum price of the
products issued in the fiscal year 2022-23, under 02 headings related to petroleum and its by-products,
12 H.S. Tariff value against Code and under 01 heading 1 H.S. Minimum price is applicable against Code.
It should be noted that the prices of petroleum and its by-products are constantly rising in the
international market, so the following decisions have been taken in order to stabilize the price of
petroleum products, which are essential for the economy, such as:-
a) Specific duty has been imposed instead of Ad valorem duty by canceling the tariff value of12
H.S. Codes under 2 headings.
b) Specific duty has been imposed instead of ad valorem duty by canceling the minimumvalue of 1
HS Code under 1 heading.
c) The above 13 H.S. Specific duty has been imposed by combining the existing 5% and 10%import
duty and customs and advance tax (AT) leviable at the import level on the importof products
under the Code. For this purpose, all musak and all advance taxes can bewithdrawn (op.cit.3)
Products on which Specific Duty is imposed:
Sourcehttps://mof.gov.bd/sites/default/files/files/mof.portal.gov.bd/page/b29661b6_927f_4012_9f83_
5ac47dbd6ebd/Budget%20Speech%202023-24%20English%20Final%20Press%20(1).pdf
b. IMPACT OF TAX INCREASE ON DOMESTIC AND INTRANATIONAL FLIGHTS
Civil aviation and Tourism Ministry gets an allocation of Tk6,596 crore in this year’s budget
Air travel will inevitably cost more on domestic and international flights as the government has
increased the travel tax by up to 67% in the proposed budget for the 2023-24 fiscal year, raised for
the first time after nine years.
An air passenger will have to pay a tax of 67% or Tk2,000 for travelling to Saarc countries, while Middle
East-bound passengers have to pay 33% or Tk4,000 and 50% or Tk6,000 for other countries.
Meanwhile, domestic air passengers will have to pay a total of Tk925 as tax increases by Tk200 from the
outgoing fiscal year.
In addition, passengers are to pay Tk1,000 for using land and sea routes for foreign destinations.
However, industry insiders and stakeholders fear that airliners, especially domestic ones, may lose
passengers due to the rise in taxes. The issue may become a key factor in the rise in airfares.
Prominent aviation expert Kamrul Islam told Dhaka Tribune: “It will be a big blow to the Bangladesh
aviation industry, and passengers will have to pay the ultimate price.”
The contribution of the aviation and tourism sector is about 3% of total GDP, but this sector has been
neglected every year.
In the 2022–23 fiscal year, Tk7,004 crore was allocated in the proposed budget. Later, it was reduced to
Tk5,628 crore in the revised budget.This year, the government has proposed an allocation of Tk6,597
crore for the Ministry of Civil Aviation and Tourism.Experts said if this allocation is lowered in the revised
budget, passenger numbers will fall due to the existing dollar crisis and the high price of jet fuel.
According to the previous decision taken in 2014, data, passengers had to pay Tk500 to Tk1,200 and
Tk4,000 as tax for North America, South America, Europe, Africa, Australia, New Zealand, China, Japan,
Hong Kong, North Korea, South Korea, Vietnam, Laos, Cambodia and Taiwan, and Tk3,000 for rest of the
international destinations. (13)
c. Increase in travel tax:
The government is set to propose in the 2023-24FY budget increasing tax for travelling by air, water and
land. In most of the cases the tax would be increased by 50 per cent. People’s travelling will be costlier if
the proposal is accepted.
d. Increase in vehicle documentation cost:
The upcoming budget could bring some bad news for the owners of personal vehicles. If anyone buys
second vehicle, he might have to pay added tax like carbon tax. The amount of added tax could be
between Tk 20,000-300,000 based on difference in CC. this tax will have to be paid during taking fitness
certificate for the vehicles.
The supplement duty for 2001-3000CC cars is likely to be increased from existing 200 per cent to 250
per cent while 3001-4000CC cars will be increased from 350 per cent to 500 per cent.
CHAPTER-07-INADEQUATE BUDGET FOR EVERY SECTOR
a. Sector-wise Allocation
Sectoral Allocation in Budget(Crore Tk.)
Sourcehttps://mof.gov.bd/sites/default/files/files/mof.portal.gov.bd/page/b29661b6_927f_4012_9f83_
5ac47dbd6ebd/Budget%20Speech%202023-24%20English%20Final%20Press%20(1).pdf
b. Allocation Is Not Increased for Health Sector
In the proposed budget, a total of Tk 38,052 crore has been allocated for the health sector, which is only
Tk 1,189 crore more (3.22 percent) than the allocation in the previous fiscal year — Tk 36,863
crore.However, expenditure-wise analysis showed there is a significant reduction of Tk 3,641 crore in
developmental spending under the health service division. The proposed budget allocates Tk 29,431
crore for the health service division of the health ministry, which is only a Tk 150 crore increase
compared to the previous fiscal year's allocation of Tk 29,281 crore.
Within this allocation, the budget for operating costs of the health service division has increased to Tk
17,221 crore from Tk 13,430 crore in the previous fiscal year.
However, the budget for development costs has been reduced to Tk 12,210 crore from Tk 15,851 crore
in the same period.
Meanwhile, the allocation for the Medical Education and Family Welfare Division of the ministry has
increased by Tk 1,039 crore to Tk 8,621 crore. It was Tk 7,582 crore in the last fiscal.
According to the budget speech, this allocation will contribute to the establishment of new medical
universities and medical colleges. (14)
CHPATER-08-BUDGET WILL INCREASE RICH POOR GAP
The voices of disadvantaged groups, the poor and small entrepreneurs have remained unheard when it
comes to policy-making as fiscal policies have been captured by vested sections of society, alleged
Towfiqul Islam Khan, a senior research fellow of the Centre for Policy Dialogue (15)
Many government measures relating to tax, some of which were proposed in the budget announced 1 st
June 2023, will only widen the gap between the poor and the rich.
In his budget speech, the finance minister hardly mentioned the issue of growing inequality even though
recent data released by the Bangladesh Bureau of Statistics demonstrates a rising trend of inequality.
Economists think that the government's tax system is not progressive because it depends more on
indirect tax than on direct tax. Indirect tax is levied on goods and services while direct tax is imposed on
income.
In the budget for the next fiscal, the government has proposed increasing indirect tax by imposing value
added tax on many necessary goods, which, economists believe, would further deepen the inequality.
The government has proposed increasing VAT from 5 percent to 7.5 percent on plastic tableware and
kitchenware, housekeeping products and sanitary ware. It has also proposed imposing higher VAT on
toilet and facial tissues. (16)
Although the size of allocation for social security programs has enlarged, the government has made no
significant changes to cushion the vulnerable groups of people from persistent inflationary pressure.
Allocation for safety net programs in the budget for the next fiscal year has been raised 11 percent from
Tk 1.13 lakh crore to Tk 1.26 lakh crore. The allocation is 16.58 percent of the total budget and 2.52
percent of the gross domestic product.
Though the monthly allowance for people with disability remains the same at Tk 850, the number of
beneficiaries has been proposed to be increased from 23.65 lakh to 29 lakh.
"The amounts allocated per beneficiary are woefully inadequate," said Islam, former special advisor,
Employment Sector, International Labor Office, Geneva.
The approach proposed in the budget will not create any sustainable solution to the problems faced by
the poor and the destitute, said Prof Selim Raihan, executive director of the South Asian Network on
Economic Modeling, adding that it's not desirable for inclusive growth.
Food distribution programs, like food for work and open market sale, will have less food, 30.92 lakh
tonnes, next year. In the current fiscal year, the programs had 32.82 lakh tonnes.
The budget did not mention any government interventions for curbing non-food expenditures of people,
like rent, transportation, and healthcare. (17)
According to recent data released by the BBS, Bangladesh's Gini coefficient, the economic measure of
equality, stood at 0.499 in 2022, which is alarmingly high. The Gini coefficient is measured on a scale of 0
to 1. The closer it is to 1, the higher the inequality in society. If it is closer to 0.50, it is considered as
manifesting high rates of inequality.
From 1973 to 1996, the Gini coefficient ranged from 0.36 to 0.39. It has since started to rise, according
to BBS. (op.cit.16)
According to the economist, the government's measures aimed at providing relief to low-income people
in the current fiscal year have also remained inadequate despite a severe cost-of-living crisis.
This overall lack of initiative and courage pretty much sums up the proposed budget, which was neither
pro-poor, even though it needed to be, nor cognizant of the rapidly growing inequality gap, which has
already reached a worrying level. While setting unrealistic targets, the government has failed to consider
the very real sufferings of the people by presenting a budget that barely looks to address any of their
most burning concerns. (18)
CHAPTER-09-CONCLUDING REMARK
The budget document has done a routine job of presenting estimates of earnings and proposals for
expenditures. In doing so, it has been cast within the framework of politically determined targets of GDP
growth, inflation rate, and budget deficit. The additional consideration of meeting the conditions of IMF
loan has also come in, although not explicitly mentioned.
It is well-known that this budget has been formulated against the backdrop of multiple challenges that
are currently being faced by the economy of Bangladesh, viz., balance of payments deficit leading to a
drain of foreign exchange reserves and deterioration in exchange rate, instability in remittance flows,
sharp rise in inflation and pressures on the conditions of living of the poor and low-income people.
Given the multiplicity of challenges mentioned above, one would have expected the budget to aim at
stabilizing the macroeconomy and protecting the poor and vulnerable – a budget for stabilization with a
human face. But given the unrealistic targets set for GDP growth and inflation rate, it's clear that the
government has not trodden that path. It is surprising to see the continuation of a growth-centric
approach at a time when a rethinking and recalibration of the policy approach was needed. (19)
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5. https://businesspostbd.com/opinion-todays-paper/national-budget-additions-for-fy-23-24-
2023-05-14
6. https://www.dhakatribune.com/bangladesh/2023/04/24/no-new-pay-scale-govt-employees-to-
get-20-dearness-allowance-in-new-budget
7. https://www.observerbd.com/news.php?id=422028
8. https://bdnews24.com/budget2023-24/fcvglbmn28
9. https://thefinancialexpress.com.bd/economy/bangladesh/nbr-chairman-defends-min-tk-2000-
tax-for-tin-holders
10. https://en.prothomalo.com/business/local/dawmtmyalt
11. https://thefinancialexpress.com.bd/economy/bangladesh/next-budget-tk-746t-gdp-growth-
target-set-at-75pc-1671590773
12. https://www.thedailystar.net/special-events/national-budget-2023-24/news/gold-carrying-
limit-travellers-be-halved-taxes-rise-3335161
13. https://www.dhakatribune.com/bangladesh/2023/06/01/budget-fy24-travel-tax-increased
14. https://www.thedailystar.net/special-events/national-budget-2023-24/news/healthcare-
spending-just-32-even-budget-sees-1234-rise-3335226
15. https://www.thedailystar.net/business/news/tk-2000-minimum-tax-discriminatory-
contradictory-cpd-3335981
16. https://www.thedailystar.net/special-events/national-budget-2023-24/news/hardly-any-
mention-yawning-inequality-3335566
17. https://www.thedailystar.net/special-events/national-budget-2023-24/news/little-cushion-
people-against-inflation-3335526
18. https://www.thedailystar.net/opinion/editorial/news/budget-has-no-reflection-peoples-
sufferings-3335416
19. https://www.thedailystar.net/special-events/national-budget-2023-24/news/fy24-budget-
unrealistically-ambitious-and-disappointing-3335311