I did not find any substantial reform measures proposed in the new budget. The budget has typical proposals – some items will be pricier while some will be cheaper. The three broad areas of reforms in the revenue sector we have been advocating for – structural transformation of our revenue system, structural transformation of our revenue administration and structural transformation in the way we define tax policy – have not been addressed.
This year is neither for increasing revenue nor imposing fresh taxes. This year is for consolidation – that means maximising the outputs within the existing arrangements.
The much-needed automation to seal the revenue loopholes has been pending yet. It is a part of tax administration reform. The proposed budget so far I have seen does not have anything about automation. Even the electronic devices for VAT collection have not been put in use.
I did not hear anything about banking sector reform or any initiative to enhance the capacity of implementing the Annual Development Programme (ADP). There were financial reform promises in previous budgets, but the finance minister did not follow up those in his proposed budget for the upcoming year. The situation of the banking sector could have been discussed. There could be discussion on banks' health as we disbursed the stimulus packages through the banking channel.
The finance minister said he kept aside Tk10,000 crore allocation for health. He did the same in the previous budget too, but the money was returned as the health ministry failed to spend the amount. We expected the budget to elaborate the vaccination plan. Because we will have to immunise a large number of the population if we want to fend off the pandemic or keep the infection rate low.
If we want to vaccinate 12 crore people, we will then need 24 crore doses. The finance minister, however, mentioned inoculating only 25 lakh people per month. If so, it will take 4 years to vaccinate 12 crore people. The success of the mass vaccination drive will require a huge resource mobilisation and engagement of rural-level local leaders and non-governmental organisations to the vaccination campaign. The health ministry cannot accomplish the monumental task alone.
I think these issues could have been addressed in the budget speech. Inoculating 5-10% of the population will not yield much success.
Health authorities need a massive overhaul so that we can say the root-level healthcare facilities are ready for pandemic management.
Revenue issues include structural and growth related problems. The growth related issues might get solved once the pandemic goes away, but we have to work for revenue structural reform.
From a reform point of view, we can call the proposed budget a "business-as-usual" one.
The bottom line is – no strong message on reform left in the proposed budget.
Dr Ahsan H Mansur is the executive director at Policy Research Institute (PRI)