Budget reaction-2005-06

Budget reaction economists

Strategy and budget allocation for poverty alleviation is unclear: Barakat

:: Expansionary budget aims at pulling votes: Dr Atiur
 
:: New budget prepared with a calculated risk of ambitious targets: Prof Wahiduddin Mahmud

:: Budget has no measures for local industries: FBCCI president

:: BGMEA hails the proposed budget as development-oriented

:: BCI demands total withdrawal of duty on basic raw materials

Abul Barakat prominent economist in the country Thursday the strategy and budget allocation for poverty alleviation is unclear in the budget 2005-06, proposed by the Minister for Finance and Planning M Saifur Rahman.

"As Honorable Finance Minister provides more focus on poverty alleviation as he does always, there is no clear strategy for it. We have to define what we mean by poverty alleviation. Who are poor? And what portion of the budget is allocated for them? This is not clear in this budget. The strategy and budget allocation for poverty alleviation is not clear to me" said Barakat.
 

He also criticised about the total size of the budget. "Total size of this year's budget is high. But we have to think that, last year government could not spend 70% of the ADP. How this increased budget will be realized this year? What are the reasons behind it? Is there any hidden reason behind it?" "There could be a political factor as the election is knocking at the door.

Awami League and other opposition parties took to city streets on Thursday protesting the proposed budget which was placed in Parliament on Thursday terming it anti-people and having no direction for country's development. Picture shows an AL procession intercepted by police in the capital city. --FocusBangla

Or is there any pressure from outside? This is not clear to me. But there are some factors behind it which is not clear to me," Barakat said.

Overall inflation rate is 1.4% and this rate is 7% for food. There is no clear strategy how this budget will contribute to control this inflation, Barakat said.

There is a provision of whitening black money and 6.5% tax is imposed on it. What is the benefit of it? In my findings I have observed that a total of 7,000 crore Taka came into our market as black money, he added.

Government declare it 100-1200 crore Taka. But end of the year, total black money realized was Taka 200-300 crore Taka. What is the benefit of it? We have to know the source of this block money. What is the amount of such black money? What are the sources? How to handle the sources? Brakat put question.

On the one hand, government anti-corruption department says that, whitening black money is not ethical; on the other hand government is keeping provision for it. Isn't contradictory? We have to make a well-accepted conclusion, Barakat said.

Tax holiday is discussed as usual. But it will be misused. We have to know the sub-sectors where tax holiday is applicable. These are not clear to me. We have to know the relationship with this tax holiday with export growth, GDP, employment. These are not clear, Barakat said.

Expansionary budget aims at pulling votes: Dr Atiur

Eminent economist Dr Atiur Rahman termed the proposed new budget an expansionary one aimed at pulling votes for the ruling party in the forthcoming general election.
 
"That's why a huge amount of funds has been allocated for unaccounted sectors like maintenance and construction in the name of rural development," he told UNB in an instant post-budget reaction Thursday.

Furthermore, Tk 60 crore has been allocated on Gram Sarkar account while he did not find any significant allocation for the destitute women.

"I did not find any special programme to achieve the Millennium Development Goals (MDGs)," he said about the downside of the Tk 64,383 crore national budget placed in parliament today for next fiscal year (2005-06).

He was also critical about the "ambitious" budget as it envisaged huge revenue collection although the collection during the current fiscal (2004-05) fell short of the target.

The economist, however, praised measures for the disabled people, monga-hit areas, poultry industry and agriculture protection as well as reduced interest rates on agricultural loans. But he remained skeptical about their implementation.

New budget prepared with a calculated risk of ambitious targets: Prof Wahiduddin Mahmud

Eminent economist Prof Wahiduddin Mahmud today said the proposed budget has been prepared by taking calculated risks of ambitious targets to accommodate various demands.

"Revenue earnings were projected to increase by 17 percent in the last budget, but they have actually increased by only 11 percent," he told UNB in an instant post-budget reaction.

"In the proposed budget also, the revenue earnings are again projected to increase by 17 percent," he said expressing concern whether strong steps on revenue collection could be taken by the government ahead of up coming general election.

A former finance advisor under caretaker government, Prof Mahmud said the projected ADP "is not in fact unduly large" if one considers it as a proportion of GDP or in the light of the country's development needs.

"But the problem lies in the mobilization of resources," he cautioned and referred to the experience of past years when the ADPs failed to reach targets. He said "the main problem of going for a large ADP is that it may jeopardize the discipline and priority of development spending."

Especially in the case of local infrastructure projects, Prof Mahmud said there would be a tendency to use them as vehicles for patronage of politics.

Among the tax measures, he said the opportunity for making black money white has been extended for another year although such a measure has always been controversial on moral grounds. "Its only justification lies in the prospect of revenue mobilization by offering only a time bound opportunity to tax dodgers."

Unless a serious tax drive is undertaken to catch those tax dodgers after the expiry of the time limit, such a measure looses its credibility and also fails to raise revenue, he cautioned.

On tax holiday, he said it was not clear what policy guideline has been followed in the selection of the sectors. "Is it for providing export incentive or for attracting foreign direct investment?" he posed a question.

He, however, said the sectors have been selected to be the deserving ones. "It is not easy to identify promising industries without serious analytical work."

Prof Mahmud said the existing structure of duties creates large disparities in the incentives provided to various sectors. For example, finished goods produced for the domestic market enjoys much higher protection compared to basic industries and capital goods.

"The new policy regarding tax holiday could be used to mitigate these disparities," he said and appreciated the steps proposed in support of agriculture and funding provision to make agriculture loans available at lower rates. But he expressed concern over corruption in the credit disbursement procedure.

He also welcomed the measure making the import of academic journal duty-free, tax exemption for donations to social welfare organizations and educational institutions.

Economist MM Akash terms budget 'unrealistic' one

Economist Dr Mahbubul Mokaddem Akash Thursday termed the proposed budget unrealistic and may be suicidal if the government fails to control inflation.

"This is a very ambitious and unrealistic budget and donor dictated paradigm pushed through --- with tag namely 'PRSP," said Prof Dr Mahbubul Mokadhem Akash adding "may be suicidal if the government fails to control inflation."

A major part of the allocations will be wasted and will add fuel to the rising of inflation as the implementing agencies have remained unaccountable and non-transparent, he remarked.

He said the budget 2005-06 proposed some block allocations apparently targeting the poor, but the implementing agencies at grass root level are neither efficient nor honest to the poor.

He said the government should take effective steps side by side to resolve the basic problems of the governance.

Whether it is pro-people, Dr Akash said the finance minister have backed out from his commitments of not giving any further chance in making the black money into white.

The most prolific finance minister, who was vocal against the black-money incorporation, extended one-year time to the black money owners to whiten their idle money coming into the country.

The black money owners are too strong that they influenced the government to change the decision," he said "the opportunity was widened in exchange of a nominal tax payment."

CPD finds 'collusive behaviour' to protect black money in proposed budget

Dr Debapriya Bhattacharya, Executive Director of Centre for Policy Dialogue (CPD) - a non-government think tank - Friday alleged that some fiscal measures in the proposed budget were generated through "collusive behaviour" designed to protect black money.

"The extreme manifestation of this was the extension of the time period for tax amnesty for undisclosed income," he said adding that measures for tax on mobile SIM cards also invoked such suspicion.

Addressing a press briefing on 'National Budget 2005-06' at the CPD dialogue room Friday, Dr Bhattacharya blamed the government for standing in favour of black-money owners.

He also observed that the proposed budget demonstrated three major trends, which are care, compromise and collusive behaviour.

In an initial analysis of the national budget for 2005-06, the CPD observed that care has been taken to upgrade some sectors in terms of allocation priority from poverty alleviation consideration.

These include the initiatives in the health and education sectors. "Other initiatives belonging to this category are those contributing to agriculture and rural development," according to the CPD analysis.

"There had also been a conscious effort to expand and deepen the social safety-net programmes," the CPD Executive Director said.

He, however, observed that without a proper poverty audit, it would be difficult to say what is the actual pro-poor intensity of the budget 2005-06.

From the compromise view, Dr Bhattacharya said that this budget would provide support to investment and employment generation against the backdrop of limitation of available resources.

That has been reflected through recasting of tax holiday provisions, continuation of a number of cash incentive schemes for selected export sectors and rationalisation of tariff and para-tariff structures.

He said there are some 'not so pro-poor trends' in the public finance basket. These are: revenue expenditure increasing at a rate faster than that of revenue earnings and development expenditure, increased contribution of the VAT in incremental contribution to the total revenue intake and extremely poor level of utilisation of resources allocated to some of the social sectors which essentially benefit the rural poor.

CPD identified 'eight sins' in this new budget, listing them as follows:

i)Bloated public investment programme

ii) Adverse selection of projects and programmes

iii) Tendentious award of tax and tariff relief

iv) Contracting of questionable suppliers credit

v) Patronage distribution through public procurement

vi) Patronage distribution through privatization of state-owned enterprises

vii) Issuance of new bank licenses

viii) Issuance of new insurance licenses

CPD observed that achieving over 6 percent GDP growth would not be so much significant for Bangladesh as South Asian countries including India, Pakistan and Sri Lanka posted similar scale of GDP growth.

Referring to the economic growth rate of India, Pakistan and Sri Lanka which posted 6.5, 6.5 and 7 percent respectively in last fiscal year, Dr Bhattacharya said, "It seems South Asia as a whole is going through a spell of relatively high growth. It is the big challenge for Bangladesh how much long it could go with this pace."

He said that the main weakness of this growth is it came from service sector not from industry, mining and labour oriented sectors.

For Bangladesh, it is not good to achieve the growth from service sector as it would not generate new employment, he pointed out.

About the rising of per-capita income, he said that there is nothing to celebrate it as Bangladesh still lagged behind most of the South Asian countries.

Regarding the investment, CPD said that Bangladesh continues to remain an under- invested country while its national savings rate (26.49 percent) remains higher than the gross investment rate (24.43 percent).

"The lowest government development expenditure was recorded in 2004-05 fiscal year," Bhattacharya said adding, "There is a thin interest in the government for not implementing the entire ADP to maintain the balance between the government's income and expenditure."

About the allocation in defence budget, he said publicly the government did not expand defence budget in a major scale. But he apprehended that the defence expenditure might be increased through different ministries.

He blasted the tiny content of the budget speech of Finance Minister this year where most of the issues were not clearly mentioned. He said, "Fairness of the budget was thus erased."

However, CPD Executive Director hailed the government's allocation for education, public service, agriculture, tax holiday, fisheries and livestock sector, rural development, agro-processing and agro-based industries.

Economists, ACC blast budget for legitimising corruption

The Anti-Corruption Commission, leading economists and business leaders Friday severely criticised Finance Minister M Saifur Rahman for giving another year to wash the black money white.

It is a "moral defeat" on the part of the Finance Minister in establishing credibility of his own policy and an indulgence to legitimise corruption, they said.

Chairman of the Anti-Corruption Commission Justice Sultan Hossain Khan told UNB that this proposition will not help curb corruption.

"We think this will not help curb corruption, but it will depend on the desire of parliament whether it would allow this for economic development," Khan said.

Eminent economist Prof. Wahiuddin Mahmud said the opportunity for making black money white has always been controversial on grounds of morality and incentives.

"Its only justification lies in the prospect of revenue mobilisation by offering a once-and-for-all time-bound opportunity to tax dodgers."

He said unless a serious tax drive is undertaken to "catch these tax dodgers" after the expiry of the time-limit, such measure would lose credibility and ultimately hamper revenue mobilisation as well as incentives for tax payment.

The professor said, "By allowing further extension of the measure to cover the tenure of the present government, the Finance Minister has lost an opportunity to establish the credibility of his own policy."

The Finance Minister in the proposed new budget extended up to June 30, 2006 the provision for bringing the undisclosed money into legal accounts by paying 7.5 percent income tax. Existing opportunity of investing such income without any explanation is due to expire by the end of this month.

"We are given to understand by different quarters that there is still a huge amount of undisclosed income in the country. We presume that a good number of people are holding such undisclosed income, who, for some reasons or other, could not avail themselves of the opportunity…," said the Finance Minister.

But economist Dr Atiar Rahman said this is a moral defeat for Saifur Rahman. Before presenting the budget he had repeatedly stated that he would not allow this further. But he had to compromise under pressure from vested quarters, he said.

Rahman said some countries in the world had allowed this opportunity only once for revenue generation and those who did not comply with, the governments in those countries came down heavily on them.

He said those who have black money will pay 7.5 percent tax while others will have to pay 25 percent tax, that means corrupts are being rewarded. "I think this is a very bad move. In its last year, the government should not have allowed this. This will only legitimize corruption," Dr Rahman said.

FBCCI President Abdul Awal Mintoo said "It is not a good idea and I personally do not support it in principle to allow another year to wash black money white. Instead of punishing tax evaders, they are being rewarded," he said.

With a discordant note, BGMEA President Annisul Haque, however, said the Finance Minister's proposal has a positive aspect apart from the question of morality.

He said if there is money circulation, it has positive impact on investment and by allowing making black money white, the government receives some taxes.

Budget Reaction Chambers

:: Budget has no measures for local industries: FBCCI president
:: BGMEA hails the proposed budget as development-oriented
:: BCI demands total withdrawal of duty on basic raw materials
:: FICCI sees negative impact on investment over corporate tax

Budget has no measures for local industries: FBCCI president

The proposed budget does not contain measures that may affect local industries as well as their export competitiveness, FBCCI president Abdul Awal Mintoo said.

In an instant reaction from his personal view, the Federation of Bangladesh Chambers of Commerce and Industry president, however, thought that the import duties on industrial raw materials should have been reduced to 5 per cent from the present 7.5 per cent to increase export competitiveness.

"With the existing duties on imported raw materials and having the problems like inefficient infrastructure like ports and roads, we would not be able to compete on the international market," he said.

Mintoo said duties and taxes in some cases like motor vehicles have been increased, but the measure would affect only a few.

He noted that the budget proposed to increase supplementary duties in few cases, but all for the protection of local industries.

"One can say it's a pro-election budget," said the apex trade body's leader. Investment in rural infrastructure is also important, but the disbursement of the allocation should not be discriminatory, he added.

BGMEA hails the proposed budget as development-oriented

Bangladesh Garment Manufactures and Exporters Association hailed the proposed budget for fiscal year 2005-2006 as pro-people, and development-and industry-oriented.

Congratulating Finance Minister M Saifur Rahman on his presenting nation budget for 11 times, the BGMEA mentioned that targeted employment opportunities and poverty reduction have been emphasized in the proposed budget.

The trade body in the highest export-earning sector thinks that the new budget would help attain the Millennium Development Goals (MDGs) set by the United Nations.

"Some 15 percent allocation of the total budget for human resource development is appreciable and most important in socioeconomic perspective of Bangladesh," said the BGMEA in singing the praise of the budgetary measures.

It appreciated with satisfaction that the proposed budget earmarked Tk 50 crore for retraining the workers of garment and other sectors retrenched following the impact of quota-free trading system and 40 million dollars for finalizing strategic plan of garment sector under post-MFA Action Programme.

"Besides, 5 percent alternative cash assistance in export has been proposed to continue for the next year to offset the impact of quota-free world trading system by using Bangladeshi garment products," the BGMEA said.

The association believes that the readymade garment industry would be more competitive in the quota-free world trading system as it proposed duty cuts on readymade garments, textile, hosiery, label and terry towel and waiver of duties on accessories, machinery and raw material of terry towel waste cotton.

It requested the finance minister for reconsidering the 15 percent alternative cash assistance for garment export and deduction of 0.20 percent tax at source from export value in knitwear sector.

The association also requested the minister to consider lump allocation of Tk 150 crore for the rehabilitation of sick industries in garment sector.

BCI demands total withdrawal of duty on basic raw materials

Bangladesh Chamber of Industries (BCI) Thursday called for withdrawal of duty from basic raw materials, saying that it's impossible for them to survive in the competitive international market after paying 7.5 per cent duty.

"Twenty-five per cent import duty is already there on readymade products while 7.5 per cent import duty on raw materials. The gap is 17.5 per cent which is illogical," BCI president AK Azad said in a statement.

He also called for raising the ceiling of individual taxable income to Tk 150,000 from Tk 120,000 as proposed in the new budget.

Budget does not reflect trade capacity needs and govt commitment: Trade expert

Country's long-term trade capacity building needs and commitment to fulfill such needs was not reflected in the new budget, said a trade expert in an instant reaction on the budget for FY 2005-06.

Asked what impact the new budget is likely to have on the country's foreign trade regime, he said the foreign trade regime can be the most effective means to achieve the millennium development goal (MDG) and the government has to demonstrate by all means that it is committed to address the country's long term trade capacity needs.

"This commitment, however, is not reflected in the new budget," said Prof Shishir K Deb, acting Chief-Executive Officer of the Bangladesh Foreign Trade Institute (BFTI), country's first dedicated trade policy think tank.

He said the world trading system has witnessed a significant change during the last ten years ever since the establishment of WTO. The impacts of these changes are being increasingly felt in almost each and every sector of the economy.

"Changes in the international trade regime especially in the WTO have direct bearing on the country's domestic policy. The message is clear: we have to concentrate on the country's trade capacity building more than ever before," he said.

He opined that the government has in recent years found itself ill-prepared to conduct trade negotiations - multilateral, regional or even bilateral. Time is high for both the government and the private sectors to identify the needs for strengthening the capacity of the responsible government departments in relation to dealing with WTO and other trade policy issues.

Besides, there is perceived to be a need for more policy forums to provide a focus for expression of different interests, including those from the private sector in relation to trade issues, he added.

He termed the proposed budget as pre-election promises of great windfalls. "There is hardly anything wrong with the government keeping an eye on the upcoming polls, so long as the economic interests of the nation is not sacrificed to partisan considerations."

Among a total of 1400 projects being taken up for implementation during the fiscal 2005-2006, the new ADP contains 516 new and unapproved projects, which are, in fact, a big and undefined chunk, he added.

Block allocations to the tune of Tk 1782 crore in the proposed budget, up from Tk. 634 crore in the revised 2004-2005, prompts one to draw conclusion that the new budget is overly susceptible to manipulation of scarce resources and misuse of public funds, Dr Deb added.

Terming the budget too ambitious and politically weighed, Prof. Deb cautioned against large scale waste and misuse of funds and suggested having safeguards in implementing the projects.

"Budgetary discipline and transparency in development spending especially related to award of contracts should be ensured," he added.

On revenue collection, he urged for a simplified tax payment procedure terming the present payment procedure a complicated one.

Considering the marginal growth performance in revenue collection, both NBR and non-NBR, the proposed tax revenue target for the fiscal 2005-2006 (Tk. 37312 crore) appears to be unrealistic.

Domestic resource collection could be increased manifold by empowering local government bodies for resource collection and expenditure. This will have a salutary effect on poverty reduction as well, Prof Deb added.

FICCI sees negative impact on investment over corporate tax

The Foreign Investors' Chamber of Commerce and Industry (FICCI) said the budget proposal for enhancing the rate of corporate tax for non-listed companies to 40 percent from 37.5 percent will have a negative impact on investments in a situation where competing economies offer lower rates.

The FICCI reviewed the 2005-06 national budget placed by Finance Minister at Jatiya Sangsad on Thursday and assessed its implications on the country's business in general and foreign investment in particular.

Restriction on the admissibility of royalty and technical know-how fees up to 2.5 percent of profit is discouraging for foreign investors, FICCI said.

Instead of raising such limit in line with Board of Investment (BoI) guideline, the budget proposes for the enhancement of the rate of tax deduction at source from professional and technical services fees to 10 percent from 5 percent.

The proposal for extension of the tax holiday facility up to 2008 is encouraging for investments. However, to ensure natural flow of foreign direct investments (FDI), the facilities should not be restricted to 18 sectors only, FCCI in its reaction to the proposed budget observed.

It pointed out that the proposed budget has not fully addressed some of the issues which could attract more foreign investment.

The chamber of foreign investors however appreciated the strong measures proposed in line with the pronounced poverty reduction strategy paper (PRSP) of the government.

The proposed budget of Tk 643.83 billion, which is 15.7 percent higher than that of last fiscal, may look ambitious to some but FICCI felt that with proper governance and monitoring, the goals can be achieved. Attainment of the PRSP goals will benefit the foreign investors in Bangladesh, it said in a written statement.

While FICCI appreciate the reduction of duty on mobile handsets to Tk 300 from Tk 1,500, the proposed tax of Tk 1,200 on new SIM cards will slow down the build up of this upcoming important sector. "The telecom sector is a strategic infrastructure for the economic development of the country", it observed.

FICCI also pointed out that the budget proposal for audit of any return certified by chartered accountants under section 82 is not in line with government's goal of simplification of the assessment process.

It observed that no significant measures have been proposed toward reform of tax administration.

"While we appreciate the retention of the three-tier duty structure, reduction of rates, particularly those applicable on raw materials, could increase competitiveness of locally made goods," it said.

FCCI felt that the proposed budget with necessary amendments would help achieve its targeted goals.

Ctg Chamber hails tax holiday decision

Saifuzzaman Chowdhury, president of Chittagong Chamber of Commerce and Industries said, "It appears from the budget speech of the Finance Minister that the government will pay particular attention to the agriculture-based industries."

He termed tax holiday for exports as a good step but disapproved of the unchanged 7.5 percent import tariff on raw materials.

In a reaction to the proposed budget for the fiscal year 2005-06 presented by Finance and Planning Minister M Saifur Rahman, the CCCI president expressed his regret that special allocations were not made for important projects of Chittagong like the third Karnaphuli Bridge.

Meanwhile, Bangladesh Stevedores Association president AHM Manzurul Alam and Bangladesh Shipping Association president Parvez Sazzad Akhtar hailed the decision to lower the duration time of imported goods at the ports from 45 days to 30 days.

Mobile-set importers happy, but not mobile operators with proposed budget

The decline of import tax on the mobile phone sets would help reduce rampant smuggling of sets, but the extra charge on SIM Card dissatisfied the network operators as it has to be borne by the subscribers.

As per the proposed budget, the import duty on a mobile sets will come down at Tk 300 from Tk 15,00 while the duty of Tk 1200 will be added for connection of each SIM Card or similar technology at local stage.

Intekhab Mahmud, senior vice president (Marketing) of Pacific Bangladesh Telecom Limited, the operator of CityCell Thursday told BDNEWS that the duty on SIM card should be reduced from the proposed Tk 1200, as subscribers has to pay the additional amount.

While expressing reaction on the budget, he, however, added that the reduction of the duty on mobile sets is impressive as it would destroy the grey market of mobile sets.

Khaled Hassan, Director, corporate affairs of GrameenPhone, told BDNEWS, "As we are not involved with the import of mobile sets, we are not happy with the budget as due to the imposed of extra amount for SIM cards, the sale of connections would definitely be decreased".

"We wanted to spread the network service to the rural areas where the poor people would not be to bear it," Khaled added.

He, however, said that customers, with the reduction of import duty on sets, would be facilitated through quality hand sets and services.

"But why a customer has to pay Tk 1500 for a SIM card that was now around Tk 300 only?" the officials asked.

Political Parties

AL, JP, CPB & JSD reject pro-rich, pre-polls budget

Ruling BNP hailed while Awami League, Jatiya Party, Communist Party of Bangladesh (CPB) and Jatiya Samajtantrik Dal (JSD) rejected the proposed budget placed in the Parliament Thursday.

City unit BNP brought out a procession, led by state minister for Cultural Affairs Selima Rahman, Jubo Dal president Barkatullah Bulu and city BNP general secretary Abdus Salam, hailing the proposed budget.

They held a rally and praised Finance Minister M Saifur Rahman for placing a welfare and development-oriented budget.

CPB president Monjurul Ahsan Khan Bulbul and general secretary Mijahidul Islam Selim said the budget has been prepared for pleasing the rich section under the blanket of nice speeches.

It will help the rich to hive resources and increase facilities and incomes for themselves, they said.

JSD acting president Prof Mohammad Shafiq and general secretary Abdul Malek Ratan said there is no indication of reforms on development, investment, employment generation and poverty reduction in the proposed budget. They demanded 40 per cent of total budget allocation for local government.

CPB and JSD also called upon the government to replace it by a public-oriented progressive budget.

JP Party Secretary general Sheikh Shahidul Islam in his reaction said the proposed budget in highly ambitious, non-executable and unfriendly to peoples' desire. It will help to increase corruption, loan defaulting, politicization and black marketing.

Rejecting the budget, Dhaka city unit Awami League, brought out a procession and held a rally from where AL leaders termed it a 'a pro-election, anti-public and poor murdering budget'.

Presided over by City AL general secretary Mofazzal Hossain Chowdhury Maya the rally was addressed, among others, by AL leaders Advocate Kamrul Islam, Hazi Mohammad Selim, AFM Bahauddin Nasim and Liaqat Sikder.

AL rejects the budget as a blatant bluff

Opposition leader Sheikh Hasina rejected the national budget for fiscal 2005-06 as a "sheer bluff" and "anti-people".

"Commoners will not get anything out of this budget," she said in her instant reaction as the government laid in parliament today (Thursday) a Tk 64,383 crore budget.

"Whatever Saifur Rahman has said about development and generation of electricity are all lies," said the Leader of the Opposition, who stayed away from the House as her party continued a boycott.

Referring to the brief budget speech, she observed that the Finance Minister had an escapist tendency while delivering his speech.

AL Economic Cell chairman Abul Mal Abdul Muhit also had harsh words in appraisal of the new budget. "The budget is incomplete, devoid of any newness. The government took a unique strategy to cheat countrymen through this budget," he said.

Giving preliminary reaction at party's Dhanmondi office, he said Finance Minister Saifur Rahman's budget speech was " brief and full of falsehood and confusion."

A former Finance Minister, Muhit said the budget is a manifestation of ambition, which cannot be implemented at the end of the day.

The budgetary measures have created opportunities for making quick money by businessmen of the ruling party, he noted.

On the proposed investment in the agriculture sector, Muhit said though Saifur predicted investment in agriculture, he did not specifically say how.

A national budget is supposed to give the nation a guideline, but this document is "devoid of any philosophy or direction to attract investment", he said.

He said the Finance Minister expected increase in revenue by 17.5 percent but did not mention how he would achieve that.

About PRSP, Muhit said the budget has no consistence with the targets set in the Poverty Reduction Strategic Paper of the government.

On job creation, the economist observed that new jobs are created through rural development and industrialization, but the government failed to do that in last three and a half years. "There is no indication of industrialization in Saifur's budget speech."

Contradicting the Finance Minister's expectation of GDP growth, he said that, as a matter of fact, the gross domestic products would be 5.2 percent instead of 6.2 percent.

Muhit said although expenditure is on the rise, poor people's earning did not increase. But a special class of people has earned huge money in last few years.

He also said that the budget did not spell out any measure for employment of the youth and women.

"The nation will not lose anything if such budget is not placed in parliament," Muhit said.

Proposed budget ambitious, election-oriented: JP

Jatiya Party (Ershad) expressing reaction to the proposed budget for the fiscal year 2005-06 Thursday said that the budget is ambitious and election oriented. The party said the budget would open the floodgate for selling and purchasing votes.

Jatiya Party (JP) leader Golam Mohammad Quader said this in an instant reaction soon after the budget was placed in the House.

Other members of the party including Begum Rawshan Ershad, Dr TIM Fazle Rabbi and Tajul Islam were, among others, present in the JP parliamentary party office at the Sangsad Bhaban during the press briefing.

GM Quader said that the budget proposed an Annual Development Programme (ADP) of Tk 24,500 crore with only Tk 9,000 crore available. But the budget failed to provide any guideline about how the remaining money would be collected.

He said, people are overburdened with taxes. But in the proposed budget Tk 5,500 crore more than the last year's revised budget has been targeted as revenue earning.

He said, simultaneously the expenditure in the non-development sector has been increased by Tk 4,874 crore. The government will spend money on the non-development sector by imposing additional taxes on people.

GM Quader said, the government has allocated a good chunk of money in some sectors but no explanation was provided to this effect. No allocation was given in the budget for the Monga affected people.

JP senior leader Dr TIM Fazle Rabbi said, "It is an imaginative budget. The reduced tax in petroleum sector will not come in handy for the people. It will work only for the businessmen".

Tariff cut in mobile set is just an eyewash because the duties on SIM cards have been raised at the same time, he said.

When asked If JP has rejected the budget or not GM Quader said, JP will discuss the budget within the party first and later the decision will be announced.

NAP terms budget 'as usual'

In their instant reaction to the national budget for 2005-2006 fiscal year placed in the parliament by Finance Minister M Saifur Rahman this afternoon, leaders of different political parties said they found it to be a routine financial document.

Terming the new budget "as usual", National Awami Party chief Prof. Muzaffar Ahmed told BSS that there was nothing new in it. The budget is not intended for public welfare, he said, adding, it has not protected the rights of the common people.

Jatiya Samajtantrik Dal leader ASM Abdur Rab said the expectations expressed in the budget to make a welfare society are not possible to be fulfilled without a total reformation of the colonial model state management.

The budget has become a customary practice in the absence of a participatory democratic political institution in the country, he added.

Workers Party President Rashed Khan Menon said the budget would not bring any benefit to the common people or help in the development of the country.

The success story claimed by the Finance Minister in his budget speech is the achievement of the farmers and workers of the country and not of the government, he said.

Samyabadi Dal leader Dilip Barua said the budget is neither industry-based nor has it protected the interest of the farmers.

Describing the budget as pro-election, he pointed out that the allocations made preferring the upper strata of society will not benefit the common people.

--UNB, BSS, BDNEWS