Stakeholders of information technology have said the national budget for 2012-13 lacked specific reflection of government's avowed policy for development of information communication technology (ICT) in the country.
They said the Finance Minister has proposed an allocation of Tk 2.94 billion for ICT sector development but it did not mention any specific sector that will be benefited by the allocation.
The government had pledged in ICT policy 2009 that it would give a lump allocation of Tk 500 million for creating 10,000 IT professionals in next two years through BASIS Institute of Technology and Management. Besides, another Tk 7 billion allocation would be given for ICT infrastructure development.
BASIS (Bangladesh Association of Software and Information Services) President Mahboob Zaman told the FE that the government did not pay heed to their demands of withdrawing 15 per cent VAT on internet use and creating a separate service code for software and IT services under VAT.
He said his association was disappointed at the budget provision.
President of Internet Service Providers Association of Bangladesh (ISPAB) Akhteruzzaman Manju said the government is giving more concentration on temporary benefit rather than long term hefty income.
"The government revenue will come down nearly Tk 400 million if it withdraw 15 per cent VAT on internet use but the volume of outsourcing and internet use will enhance rapidly which will ensure more revenue than the government expects," he mentioned.
Otherwise the government will not see significant development in the sector, he observed.
President of Bangladesh Mobile Phone Importers Association Mustafa Rafiqul Islam said mobile handset is playing important role to spread use of ICT across the country. And people are becoming habituated to use internet over mobile phone.
But the government has not reduced duty on import of mobile handsets.
He said they suggested the government to impose Tk 100 as flat rate instead of existing 12 per cent for each mobile phone.
At present 95 per cent people use internet through mobile handset,
Finance Minister AMA Muhith will present the national budget for the next fiscal year (FY), 2012-13, to parliament today (Thursday), amid various accounts that have already appeared in the media about its aggregate size, revenue collections, deficit, and implementation performance of the government. This will be the fourth fiscal in a row for which the incumbent finance minister will announce the budget. He is expected, as usual, to put a major emphasis on boosting growth, curbing inflation and creating more jobs.
The main drivers of growth next fiscal, as the reports indicate, will be the projected higher revenue collections, increased remittances from migrant workers, expanded size of public sector development expenditure, expected higher levels of private investment, operationalisation of public private partnership (PPP) projects as well as hopes about a steady growth of exports. However, the outlook of the global economy and the lingering domestic economic constraints are different issues for consideration here, though their linkages with the budgetary outcomes remain undeniably strong.
Meanwhile, the current inflation rate at 11 per cent, on an annual average basis, is considered by many as one of the key challenges before the government, to maintenance of macro-economic stability. The earlier promise of the government to bring it down to 7.5 per cent this fiscal could not be materialised. Again, the finance minister will certainly be making the promise to lower it in the next fiscal. How far this promise will be redeemed, in the face of many daunting challenges on both domestic and external fronts of the economy, will involve many critical questions.
Furthermore, the existing gap between the demand for, and supply of, power and gas is another major hindrance to realising the economy's growth potential. Besides, there are challenges of the infrastructural deficit in many other areas and the present difficult state of the capital market. The financial sector is also facing problems of liquidity shortage, amid an appreciable hike in lending rate in a situation where deposit rate can not be brought down without abatement of price pressures. Besides, there are worries over the pressure on the country's balance-of-payments (BoP), amid uneasy conditions about disbursement of the committed external assistance, declining trend about foreign direct investment (FDI), slowed-down growth rate of remittance and lowered level of import of capital machinery, coupled with increased public borrowings particularly from the banking sector with its crowding-out effects on private sector, bulging subsidies bill, unspent fund under Annual Development Programme (ADP) etc.
In this backdrop, there are many Doubting Thomases about achieving the likely-to-be projected economic growth rate at 7.2 per cent in the next fiscal, up from an estimated 6.32 per cent in the current one, amidst the afore-noted challenges. This year's targeted gross domestic product (GDP) growth rate at 7.0 per cent has not been achieved. However, the finance minister is still upbeat about the growth rate to reach at 6.7 per cent, after the finalcalculation.
It is true that the GDP growth rate is not the only indicator about improvements of socio-economic conditions of the country's teeming millions. But without higher level of growth, largely facilitated by higher level of investment, it will be impossible to raise the rate of the country's GDP growth to any meaningful level. Will the budget for next fiscal be a prop for this?
The government is pinning much hope on strong farming sector, more earnings from expatriates and also stepped-up non-farm economic activities in rural areas. The rice crop for the current fiscal rose to a record of about 35 million tonnes from the previous year's 34.25 million tonnes, thanks to public-policy supports as well as the resilience of the farmers to help raise productivity. This would indicate the opportunities for the economy to reap dividends for improving its scorecard. But harnessing the opportunities will involve not words but hard actions on a sustained basis to bring about institutional reforms and structural changes.
The size of the budget for the next fiscal, according to media reports, will be Tk 1.9 trillion, against Tk 1.6 trillion for the current one, with bigger allocations being made for infrastructure, health, education, power and the rural economy. Annual development spending will be Tk 543 billion, to be funded to the tune of Tk 215 billion by foreign loan. This is Tk 83 billion more than that of the present fiscal.
The low level of disbursement of foreign assistance this fiscal remains here a matter of concern. The share of foreign aid in budgetary resources in the current fiscal has been around 0.6 per cent of gross domestic product (GDP). This should be, at least, 3.0 per cent of GDP, as the finance minister had earlier said. Raising the capacity of the government to utilise external aid to this level will be no easy task, given the current level of its performance about utilising and absorbing the external aid from the pipeline. In fact, the government is still not capable enough to effectively utilise the available external aid, barring the amount of the committed support for the proposed Padma Bridge project that has been put on hold on grounds of alleged corruption.
Meanwhile, increased levels of allocations of government expenditures, both recurring and development, for social sectors and infrastructural facilities, are welcome. If such expenditures can be utilised efficiently, this will provide an opportunity to realise the growth potential of the economy. But questions do also relate here to the quality of such expenditures, in terms of value-for-many criteria.
The budget for the next fiscal is otherwise expected to leave enough room for private entrepreneurs to invest more in power and energy and in areas of infrastructure-related projects under the Public-Private Partnership (PPP). The government could not, however, achieve so far the desired results from the PPP initiative since its launching three years back. Will the private entrepreneurs this year come in a big way to respond to this? It is difficult to venture at this stage an answer, quite objectively, to this question.
The budget, through its fiscal proposals and resource allocations, will affect different sections of the people differently. It happens with every budget. Not necessarily, a budget is, in reality, always friendly to the poor and the under-privileged, though it is stated otherwise in the budget speech and other relevant budget documents. Its different tax proposals and also resource allocation pattern give signals about the priorities, both stated and unstated ones, of a government. However, it is normally found that consequent upon announcement of the budgetary proposals, the prices of some products go up in the markets. This does often lead to more sufferings of the common people. Furthermore, the intended benefits of public expenditure cannot always be reaped by the common people due to lack of effective follow-up actions for targeting properly such expenditures.
In the present context, taming the inflationary pressure should obviously be the prime concern of the government. The prices sometimes tend to rise in Bangladesh without showing any valid reasons. Past experiences suggest that a section of dishonest traders raise the prices of essential commodities, irrespective of whatever tax or other proposals are made in the budget. On many occasions, tax and duties were cut or withdrawn. But there was no reflection of such fiscal adjustments in the prices in the market. In fact, a section of unscrupulous businesses give a damn to the budgetary measures; they just cash in on its announcement. Imperfection of the market is more responsible than anything else for such a situation. As a result, the common people get confused about the whole budget.
In the developed world, budgets do normally bring some relief to the people in general, while in the developing economies like those of Bangladesh, it is, on most occasions, found to be different. Furthermore, the statutory regulatory orders (SROs) that are issued at times by the government after the approval of the fiscal measures by parliament, do also lead to enhancement of the prices of many items.
The finance minister received, as usual, a good number of proposals and suggestions from different stake-holders in the process of his pre-budget consultations this time, too. He had already held a series of meetings with such stakeholders. Common concerns were raised by different stake-holder groups in those meetings on many knotty issues and challenges. It will be worthwhile to see now how the finance minister proposes to take actions on the same, through the budget that he will announce today (Thursday) in parliament, for the next fiscal.
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Welcome to the Kuakata google satellite map! This place is situated in Patuakhali Zl, Barisal Div, Bangladesh, its geographical coordinates are 21° 49' 0" North, 90° 7' 0" East and its original name (with diacritics) is Kuākāta. See Kuakata photos and images from satellite below, explore the aerial photographs of Kuakata in Bangladesh. Kuakata hotels map is available on the target page linked above.
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