Finance Minister Mustafa Kamal, during the presentation of the 2022-23 budget, mentioned the word inflation 29 times, while also saying, "The highest emphasis will be placed on containing inflation."
The first bad omen was the announcement by the commerce ministry soon after the speech: price per litre of bottled soybean oil was hiked by Tk7 to Tk205 by the commerce ministry.
During his speech, the finance minister, after highlighting the importance of keeping inflation at 5.6%, also added a telling caveat: "Our main strategy for the next fiscal year will be to increase supply while reducing growth in demand."
Experts believe this means the benefits of the budget will likely be reaped by businesses instead of the common people.
As Bangladesh is an import-dependent country, there was an expectation that import duties would be reduced to soften the blow of inflationary pressure.
Instead, such tariffs have not been reduced.
Even in the case of value-added tax (VAT), which too had seen massive increases in the last three budgets, the reduction was seen only in one or two sectors, which will not directly help consumer spending.
The imposition of 5% VAT on the manufacture of mobiles and refrigerators at the local level will increase the prices of these products. Furthermore, the government has proposed an increase in the price of 20 products - railway tickets, water purifiers, laptops, among others.
A 2.5% decrease in VAT has been proposed on restaurant food, but that too may not help the general populace.
Taxpayers may also have expected some reprieve brought on by an increase in the tax-free income ceiling. This, too, did not come about.
At the same time, steps are being considered to bring all of the around 40 million people belonging to the middle class under the tax net, as many do not pay their taxes.
Towfiqul Islam Khan, senior research fellow at the Center for Policy Dialogue, told The Business Standard that honest taxpayers were not getting benefits in the budget. "Instead, the rich have been given the opportunity to reduce corporate taxes or bring money from abroad to the country," he said.
He also said the government's GDP growth aim contradicted its desire to reduce demand.
Consumers aside, there were also big hopes that the budget would provide much needed lifelines for those on the brink of or below the poverty line.
Again, this may now end up being a pipe dream.
Social safety nets expand on paper only
In the proposed budget the allocation for social security has been increased by Tk2,000 crore to Tk1,13,576 crore.
Of this, however, the allocation for pension alone has increased by more than Tk5,000 crore.
Therefore, in reality, allocation in the sector has actually fallen by Tk3,000 crore.
Furthermore, allocation for Open Market Sales, a tool to drastically reduce the impact of rising prices on the vulnerable, has been slashed by Tk223 crore.
Allocations for employment generation and food programmes to benefit the poor have also been cut.
In short, the proposed overall allocation for the social security net has increased by less than 2%, while the allocation for pensioners has increased by 21.48%.
In the new financial year, even the 57 lakh elderly and widows who are currently receiving an allowance of Tk500 per month will see no increase in their stipend.
The basket of goods this stipend -- fixed seven years ago -- could buy would now cost Tk691.
The proposed budget increased the allowance of people with disabilities by Tk100 to Tk850, but no other allowances were raised. At the same time, it proposed bringing 3.65 lakh new people with disabilities under the net. Additionally, 2.09 lakh beneficiaries have been added under the mother and child support programme.
The allocation for relief in flood, drought, cyclone and other natural disasters has been reduced by Tk100 crore, alongside a fall in allocations for alternative employment for beggars and the welfare trust for people with disabilities.
However, there is a proposed increase in allocation for subsidy for small and medium enterprises by Tk2,200 crore to Tk5,000 crore. ***
Dr Binayak Sen, Director General of Bangladesh Institute of Development Studies (BIDS), said allocations in the social security sector as a share of the budget have declined proportionally from 2.7% to 2.3%.
Terming the reduction remarkable, he said, "Another issue is food. It is said that 50 lakh people will be given 30 kilogrammes of rice for five months. We will need eight lakh twenty seven thousand tonnes, but now we have 20 lakh tonnes in stock and four lakh tonnes of that will have to be stored forever. That leaves 16 lakh tonnes, out of which 8 lakh 23 thousand will go to the 50 lakh people," he said.
"So now if we can't increase the public storage capacity, we can't run the food assistance program."