The country's middle class is now under a three-dimensional pressure stemming from discriminatory economic policies, international markets and natural disasters. But the proposed national budget for the FY2022-23 does not have anything to protect them, according to economist Debapriya Bhattacharya.
"The middle class currently does not have any political representation. There are no guardians for the class economically and socially," he said on Sunday at a press conference organised by the Citizen's Platform for SDGs, Bangladesh.
In his keynote paper titled "What is there in the Budget for the Left Behind People?", Debapriya, also the convenor of the platform, said the middle class that has emerged over the past decade has been neglected in terms of income, education, health and social safety and security.
"In addition, the finance minister said the middle class is evading taxes. But there is no discussion in the budget about how much talent and qualifications of this class are being used and how much justice is being done to them," he noted.
"Taxes have been raised on items widely used by middle class people such as smartphones, laptops, water purifiers and refrigerators. If such tariff hikes are to protect the local manufacturers, the middle class users should also be given different benefits. But that is missing in the budget."
Debapriya said though the subsidy has been increased by 54% in the budget, a large chunk of it will be spent on capacity charges of power plants.
"Although the allocation for social safety has increased, it has decreased in comparison to the GDP and budget size. Besides, if the pension for government officials is excluded from the safety fund, the actual allocation appears to be about Tk3,000 crore less than the previous budget," he said.
The economist said there is no allocation in the budget for the universal pension scheme, which has been promised to be introduced soon.
He added that the real wages have been declining since 2019. Therefore, salaries in various sectors including the readymade garment industry need to be raised. At the same time, it is necessary to maintain the purchasing power of the poor by reducing the tax rate.
He suggested a reduction in taxes on liquefied petroleum gas, coal and liquefied natural gas.
Debapriya said there is no alternative to increase the interest rate as the inflation rate is spiking, while the exchange rate is also under pressure.
Savers are actually losing more than 2% of their deposits as the deposit rate is lower than inflation, he added.
The economist said though the budget did not increase benefits for the poor, it offers amnesty to people who had syphoned money off the country by paying a minimal tax.
Noting it would be difficult to collect huge amounts of money from foreign sources to meet the budget deficit, he suggested the government consider budget support from the World Bank, Asian Development Bank and the International Monetary Fund.
He feared the government's excessive bank borrowing to meet the budget deficit may hurt the private sector credit growth.
RMG labour activists Taslima Akhter said the budgetary approach to reducing demand would be a cruel decision for the poor, who have already been struggling to manage three meals a day.
TIB Executive Director Iftekharuzaman said as more than half of the lawmakers are businessmen, the budget turns out to be pro-rich.