Our democracy again proved its holy stance in favour of forces that are politically destined to hold the spirit of liberation of Bangladesh to be the beacon of their every strides. Four times being the prime Minister in a democratic process, Sheikh Hasina is becoming the apt symbol of that sanctimonious tasks. In her jump starting, the dreams of Bangabandhu will come true in reality and that will be the yardstick of her laying the building blocks of a prosperous, inclusive and pro-people democratic Bangladesh.
As we have got a continued government of the old alliance with Sheikh Hasina at the helm, our easy equations go to that extent that this period will not suffer from any politically deficient force for correcting the faults done in socioeconomic sectors willy-nilly though after having their vast success story. They have laid foundation to pave the way for achieving higher growth target and Bangladesh is becoming one of the six countries which are branded as the top most growth achievers in 2019 according to the Economist Intelligence Unit’s forecast. Bangladesh is on the way to being transformed into a developing country status within 2021 and will be ended up into being an upper developing country within 2030. Not to speak of the much talked about mega projects and their synergy effects on socio-economic fabrics, economic vibrancy in rural economy, in the expansion of rural non –formal sectors, creating job opportunity and income generation, in the expanded infrastructural build-up, bringing dynamism in external economy, in the growing up of comfortable reserve scenario and last but not the least the achievement of some social indicators particularly in child mortality, mother mortality during delivery, girls’ enrollment out passing India and Pakistan—all are visible achievements of the government in their immediate past.
The buying spree of the very commoners reflects demand push growth is getting momentum. The central bank was able to rein in inflation within comfort over the years without harming the two opposite variables—ultimate consumers and investors. The question of not declining interest rate is another narrative of economic discussion. These are the comfortability in economic and social sectors achieved and seen visibly of this government of their two consecutive terms before sworn in in a new form of the present.
But the things demand a holistic approach. Many related variables or so to say factors are left unaddressed willy-nilly which were pertinent to be held forth in the run up to reach a developing economy to which the present regime is committed to. Not to speak of disorder in financial sector, other sectors in macro economy and social sectors were suffering to some extent lack of governance. These are being much talked about. But here also we have some different options. We are not adding short term trajectories which are very natural inherent in a regime following market economy in some imperfect way as fault phenomena. In some cases administrative loopholes reinforced by biased political blessings and century old corrupt instinct in mindset in socio-political and economic upbringing are constantly attributing to the problem of good governance. Negligence towards implementation of any reform programme is one of the manifestations of this reality. It needs time to go. But we prone to upheld those economic and social infrastructural impediments that ware neglected to address and our trust will not go otherwise, the newly formed government vitalized by new blood and Sheikh Hasina at the helm are and will be keen to address. Otherwise Bangabandhu’s centenary will not be blossomed by the smiling faces of the millions.
Our basic problem is the low revenue-GDP ratio. The revenue-GDP ratio in FY2017 was 10.2 percent, which was 9.2percent in FY2009. Though it showed signs of improvement, still it is below compared to other developing countries, where the average tax-GDP ratio is about 15 percent. The seventh Five Year Plan (7FYP) had proposed to raise the revenue-GDP ratio to 16.1 percent and tax-GDP ratio to 14.1 percent by FY2020. The performance record indicates that Bangladesh is not only lagging behind comparator countries but also vis-à-vis its own programmatic targets. So higher domestic resource mobilization by raising revenue-GDP and tax-GDP ratio ought to be seen as one of the topmost priorities by the new government in view of the increasing resource needs and the new challenges in mobilizing financial resources from abroad. Focus should be made on raising the share of direct tax. Income tax-GDP ratio is running low and it was proposed to rise to 5.4 percent in 7th FYP in 2020. This ratio was 1.9 percent in FY2009, which rose to 2.9 percent and fell to 2.7 percent in FY2017. According to 7FYP, in FY2020, 38.3 percent of total tax revenue is programmed to be mobilized from income tax. It was 30 percent in FY2017.
In revenue earning, major part is coming from indirect tax that is value added tax (VAT), supplementary duty (SD) and import duty. In total tax revenue, the share of VAT was 38.8 percent, SD 17.7 percent and import duty 11.7percent respectively. A recent study by CPD found that 68 percent of the eligible taxpayers did not pay income tax in 2017. More than one-third of the top earners did not pay taxes. Along with this, there is also the issue of tax evasion. Here we need a vigorous reform without any political intervention. Our foreign direct investment is far low and lagging far behind in comparison with Vietnam, Sri Lanka and even Pakistan. Maintaining internal political and social fabrics conducive to foreign investment is a time testing demand. We are not saying about short term measures to be taken as reform agenda. A fluctuating phenomena has always been active in export earnings, foreign direct investment and remittance.
Just now to see the present scenario where a sense of contentment is gaining momentum in export and remittance sectors. But our basic problem lies in the dearth of investment. We know the private sector is on the driving seat to growth. Here we need a dynamic private investment of both internal and external. Here we are lagging far behind. Even we are not fulfilling the target of 7FYP. Still a considerable chunk of investment is carried out by public sector. We need nearly 30 percent private investment. Where it is getting stuck in 22 to 23 percent over the decade. Though bank money is swelled up but finding no way to productive investment and critics say, it is being syphoned abroad off. According to Bangladesh Bank, loan rescheduling soared about 30 percent to TK10,963 crore in the first nine months of 2018, fueling further fears for the sector. Between 2012 and 2017, banks rescheduled loans amounting to TK.89,515 crore. The rise in loan rescheduling in recent times has created extra pressure on the banking sector. That is another discussion. But in the wake of Bangladesh being ranked as the second largest economy in South Asia, the new government is even more obligated to keep up private investment momentum breaking the present stagnancy and infusing dynamism in doing business.
We propose to form price commission for agricultural products to the benefit of ultimate producers and consumers and exporters. This is the dire need of the hour. At the same time we are proposing to stop banking division in finance ministry to pave the way for being Bangladesh Bank to be the sole supervising authority over financial sector. By making financial sector to be the prey to bureaucracy with making Bangladesh Bank (BB) a puppet goes against the concept of central banking. To- day’s the much talked about anarchy in financial sector, nearly 1 lakh crore taka non-performing loan and all sorts of scams to have been happened due to part played by this division. Make BB powerful and autonomous following the precedence of others in South Asia and make it accountable to parliament, not to bureaucracy. We are proposing to new finance minister to immediately take steps for reforming financial sectors with high handedness without delay. Sorry to say it was suffering negligence from finance minister before. What we believe that the size of the cake is to be enhanced otherwise distributive justice is not able to keep up. A society of non-existent corruption and disparity is a dream in a economy committed to market economy. That does not mean market economy will give birth to unbridled disparity. Only distorted market goes with naked disparity which are happening in Bangladesh.
We are coming across a process going on by which Bangladesh is topping in rapidity of making inequality in South Asia. According to “World Ultra Wealth Report-2018” resource appropriation by ultra high net worth population or so to say the top most rich in six years (2012-17) is increased by 17.3 percent rate and it is the speediest rate in South Asia when we see a 7 percent growth achievement within this span of time. That means, a big portion of growth is appropriated by a few at the helm. We are not going more with numerical munching here. But only to say a dire state of inequality is eating up the vitals of the society and its good senses. This big guns are not investing their unearned income in internal market. If it is so we have a respite over nearly 22 lakhs man power entering in job market a year. SDG calls for “no body left behind.” The ongoing government is firmly committed to SDG. Could we achieve this if a society sees decay of good governance, declining values, vitalizing lawlessness and lack of judgment due to persistent inequality?
Writer is a freelance contributor.