Budget Watch : 2002 [Jul 24, 2002]

Date: Wed Jul 24, 2002 4:12 pm

Sub: [ALOCHONA] Budget Watch: My feelings

Dear Alochoks,



I am not an economist. Macro and micro economic theories are not so clear to

me. So, my budget criticism will be as a typical middle class citizen. If I

call this budget (2002-2003) as a highly ambitious budget, would it be

injustice? NO. Let me explain you why.



First let us have a bird's eye view to the current budget:

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1. Total budget is Tk.44,854 crore (13.6% higher than last year)

2. Total budgeted is Tk.33,084 crore (20% higher than last year)

3. Deficit is 4% of GDP (2.1% will be procured from foreign source and 1.9%

from internal source)

4. ADP costs Tk.19,200 crore (Last year ADP was heavily criticized by this

government because it was Tk.19,000 crore. But it is not understandable why

this year it has to increase by Tk.200 crore)



EARNING Ratio of Budget::

Tax - NBR : 53%

Tax - Non-NBR : 4%

Internal loan : 12%

External loan : 14%

Others : 17%



EXPENDITURE Ratio of Budget:

Education : 15%

Communication : 13%

Interest : 10%

LGRD : 9%

Agriculture : 7%

Health : 7%

Defense : 7%

Public Admin : 6%

Police : 5%

Social Security : 4%

Fuel & Electricity : 6%

Pension : 4%

Others : 9%



I know it is not easy to make a popular budget. But the time we are passing

very critical and government's only target should be just SURVIVE and help

people to survive. Unfortunately, this budget too didn't favor its common

people to survive in this adverse situation. Government also have to

survive, certainly. So, government had to increase tax to meet the INCREASED

expenditure, surely. But why the expenditure had to increase by 13.6% within

a year. What the government did to increase the income of tax payers?



Yes, some people are happy with this budget. The minority rich people who

was favored by reducing taxes from their income. Because government didn't

make his target rich people (or illegal earners) for taxes. Government

target is majority lower income people. Because they are largest in number.



Government happily declared that tax payers will be increased by 500,000.

Who are they? They are the people who suppose to be below taxable level in

next 5 years. They are the people who hardly earn Tk.7,000 per month. They

are the people who cant save a ONE taka every month. They are the people who

take burden of 6 family members. They are not among those government

employees whose legal income Tk. 4000, but illegal earning more than

Tk.50,000! There are no tax for illegal income whatever the amount is.

Illegal earners are safe from government tax department.



A sweet and favorite sentence of Finance minister is "earning from internal

source". Good word, no doubt. But what is that "internal source". Tax? If

there is no income, how there will be a tax? If there is no business how

there will be income? If there is no investment, how there will be a

business? If there is no environment, how there will be an investment? Who

will ensure the environment of investment? Government or investor?



Lets move to a different matter. I am a simple private service holder. I pay

around Tk.20,000 taka income tax per annum from my salary. I have to go to a

government office frequently to obtain an export document (Visa). I have to

pay Tk.100 bribe to the person who entry the number of that document in a

register book. (I have to pay others too, but I pick just one for instant

example). This 100 taka is in addition to the givernment fee. This person

issues more than 100 visa every day. So his daily income is Tk10000 and

monthly Tk.250,000!! That clerk has modern flat in Khulshi, the most

expensive residential are in Chittagong. Beleive it or not! Does he need to

pay tax? NO. Because his official income is Tk.4500 per month and he is a

government employee. Government employees don't need to pay tax and from

this year finance minister declare to preserve an amount of Tk.50 crore

(from our tax money) as their income tax!! Feel funny?



Finally, It's not a favorable budget for me. Because I cant afford new car

or air conditioner. I have to buy milk powder and Soya bean oil.



[PS: duties have been increased on Milk Powder, Soya bean Oil etc. and

duties have been reduced from New Car, Air Conditioner etc in the current

budget]





Peace for all,

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**Note: My article in Alochona