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The FY Budget 2018-19 in Bangladesh: Opportunities and

Challenges
The FY Budget 2018-19 contains both optimism and pessimism for the common masses of
Bangladesh considering its some expanding beneficial initiatives, some contractionary accounts
in the case of issues of importance and some unaddressed challenging issues. This budget is
typically routine-wise, traditional, highly ambitious and devoid of unexpected bubbles of
speeches of expectations though it has frustrated many in some cases of importance, urgency and
public-significance.

Astonishingly, there is hardly any light of hope for the people of middle-income level though
there is surprising incentive package for the private bank-owners wherein the government is yet
to impose control on the issues of much corruption, fund embezzlement, loan default and drastic
lacking of regulation and supervision in the banking sector and complications in the capital
market.

There are special incentives and initiatives for the sectors of investment, industry, trade and
commerce, agriculture and energy, social security net etc. whereas there are special preferences
for the importance in the implementation of mega infrastructural development projects, the
highest allotment in education and ICT sectors, the reduction of corporate (Bank) tax rate, the
exemption of VAT from local investment especially in the production of motor-cycles and
mobile-phone sets.

Pathetically, there are no clear-cut directions to enhance employment opportunities, especially a


crucial demand of educated youth in recent years though the supplementary duty on the
polythene and plastic materials will help save the environment. Optimistically, the farmers will
receive proper price as there is imposition of 28% duty on the rice import whereas the
introduction of universal pension scheme is laudable though it’s challenging to implement it.

Though the expansion of social security net in number and fees and the increase of agricultural
subsidy are absolutely praise-worthy, the banking sector will negatively affected if tk. 42
thousand crore debt is drawn from the banking sector. The finance minister is greatly hopeful
about export income and remittance income as there is positive growth in the world GDP and
trade and commerce and for the development of workplace in the garments sector.

The major dependence on foreign loan in meeting up budget deficit has some negative effects on
our socio-economic improvement whereas the health sector is totally neglected as the common
people have to loss most of their income to meet up the health expenses. The reduction of bank
tax rate ignoring other sectors of the corporate arena is totally discriminatory whereas it’s
unimaginable for the NBR to meet up the next fiscal year target of tax revenue.
Though all budgetary receipts, expenditure and fiscal deficit –in proportion to GDP- in the first
nine months of the outgoing fiscal , were much below their projections made in the original as
well as revised budgets for the outgoing fiscal, the finance minister is hopeful about dynamism in
the budget execution in the remaining months of the outgoing fiscal. The 5.00 pc VAT proposed
on e-commerce is pessimistic for the booming e-commerce sector whereas the rate of budget of
budget implementation in the country has been shrinking gradually over the years according to
government data.

A substantial increase in education and health sectors is essential for attaining the Sustainable
Development Goals (SDGs) whereas the increasing capacity of the NBR, implementation of the
VAT law and identifying areas for expanding the tax net would be critical for attaining the
government’s increased revenue target so far.