The recently proposed budget for the fiscal year 2024 has left many stakeholders feeling uninspired. Despite its substantial size and ambitious targets, the budget fails to address critical issues and lacks the innovative measures needed to drive significant economic growth and development.
Lack of Focus on Key Issues
The budget proposal has been criticized for not adequately addressing several pressing concerns. One of the major criticisms is its insufficient allocation for the healthcare sector. Although there is a modest increase in the healthcare budget, it is far from enough to meet the rising demands and address the systemic issues plaguing the sector. The persistent underutilization of allocated funds further exacerbates the problem, highlighting the need for more effective budget implementation and oversight.
Similarly, the education sector, despite receiving a slight increase in allocation, remains underfunded. The budget allocation is still well below the targets set in the 8th Five Year Plan, which aimed for a budget of 3% of GDP for education. This shortfall is likely to hinder the development of a skilled workforce, which is crucial for the country’s long-term economic growth.
Unrealistic Economic Targets
The budget sets ambitious economic targets, including a GDP growth rate of 7.5% and an inflation rate of 6%. However, achieving these targets seems unrealistic given the current economic environment. The country has been grappling with high inflation rates, which have remained around 9% for much of the outgoing fiscal year. Additionally, the global economic slowdown and domestic challenges make the GDP growth target appear overly optimistic.
Overreliance on Borrowing
The budget outlines a fiscal deficit of 5.2% of GDP, with plans to bridge this gap through substantial borrowing. The government aims to borrow Tk 1.02 trillion from international lenders and Tk 1.55 trillion from domestic sources, including Tk 1.32 trillion from the banking sector. This heavy reliance on borrowing raises concerns about the sustainability of the country’s debt levels and the potential impact on the banking sector and overall economic stability.
Insufficient Reforms and Innovations
Critics have also pointed out the lack of innovative measures and reforms in the budget. The proposal does not introduce significant new policies to boost tax compliance, reduce tax evasion, or expand the tax base. Instead, it relies on traditional measures such as changes in VAT and duty structures, which may not be sufficient to meet the ambitious revenue targets.
Conclusion
In summary, the budget proposal for FY2024, while ambitious in size and scope, falls short of addressing critical issues and lacks the innovative measures needed to drive significant economic growth and development. To create a more robust and effective budget, the government must focus on addressing systemic issues, setting realistic economic targets, reducing overreliance on borrowing, and introducing meaningful reforms and innovations.
This report is based on an article from The Daily Star. We encourage readers to form their own opinions on the Bangladesh Budget 2024 and consider the various perspectives on its potential impact.
For more details, you can refer to the original article from The Daily Star.
