Mega budget: Implementation big challenge

The proposed national budget finance minister AMA Muhith presented to parliament on Thursday for the 2018-19 fiscal year (FY) is the biggest one in the country’s history. The Tk 4.64 trillion budget, which is 25 per cent larger than that of the revised budget for the last FY, will once again test the ability of the government in budget implementation. The government seems to be aware of this. While describing the proposed budget as a ‘pro-people’ one, road transport and bridges minister Obaidul Quader, who is also general secretary of the ruling Awami League, admitted that its implementation would be a big challenge for the government.

Budget financing will be very difficult in the next fiscal year. Realisation of aid disbursement target will be too tough for funding the budget. Financing from the non-banking sources, which is targeted at 1.0 per cent of the Gross Domestic Product (GDP) in the proposed budget, will also be difficult for the government. Analysts say certain things need to be prioritised for proper implementation of the budget. These include policy reforms, simplification of taxation system, business-friendly policies, policy continuation, and ease of doing business.

Special attention should be paid to the rising inflation rate in the new fiscal year and take measures to contain it. Inadequate infrastructure and shortage of power and energy are the main impediments to the growth of the economy.

It is necessary that there should be proper utilisation of allocated resources and their timely completion be ensured. The benefits of these measures will only be effective if they are implemented in a timely and effective manner.

The proposed budget does not make any specific proposal about reforming the state-owned enterprises (SoEs). No measures have been proposed for curbing deficits of SoEs or the non-performing loans of the state-owned commercial banks (SoCBs).

On the contrary, the budget proposes to continue the financing of SoEs’ deficits and capital shortfalls in SoCBs through budget transfers. This is an ‘unjustified burden’ on the taxpayers. It encourages inefficient practices.

The government has proposed that the employers would submit statements on the submission of returns by their employees. Otherwise, tax returns of the employers will be subjected to audit. This provision for auditing might turn into a source of harassment for many transparent taxpayers.

The proposed budget has, however, some positive elements. The budget proposal for reducing corporate tax on the banks and other financial institutions by 2.5 per cent is a good sign. Other sectors should get the same benefits.

Proposal for withdrawing provision of taxing dividend income multiple times is also a welcome gesture. Such exemption is expected to benefit many existing companies and encourage local investment further.

Attaining the increased revenue target for the new fiscal will continue to be a major challenge, despite a rise in the number of tax payers. The National Board of Revenue (NBR) has targeted Tk 2.96 trillion in tax revenue for fiscal year 2019, which is 31.64 per cent higher than the revised one of Tk 2.25 trillion of the outgoing fiscal. In order to meet the target, the authorities should find out new avenues of tax collection instead of increasing tax burden on the compliant enterprises. It is necessary that the government should set the inclusion target of new taxpayers’ number for each of the tax officials and reward them for enrolling fresh taxpayers.

Economists say the projected 7.2 per cent GDP growth target for the next fiscal is ambitions. The country needs to raise the investment-GDP ratio to 29 per cent, if it wants to attain the projected GDP growth.

The ADP (Annual Development Programme) implementation will, according to analysts, also be a challenging task for the government as it does not have adequate administrative support to implement such a large-sized ADP. The size of the ADP is almost 30 per cent higher than that of the outgoing fiscal.

Some economists lauded several initiatives of the proposed budget, including initiating inclusive pension system for all, focusing on job creation for the young generation, increasing subsidy and allocation in agriculture sector and steps to control tobacco usages.

But there is no proper direction in the proposed budget about what measures would be taken to quicken the rate of reducing poverty or discrimination.

Given the tax revenue growth which was witnessed during the outgoing fiscal, the government will face a few challenges to meet the target to be set for the upcoming one. The budget deficit is in the upcoming fiscal is projected to reach Tk 1.25 trillion or 4.9 per cent of the GDP.  Although there are huge allocations for the mega projects, the budget has no direction for avoiding time and cost overrun of the projects or for ensuring their quality. It has been seen that the budget implementation rate has been decreasing year by year. Nothing has been said in the budget about how to increase the rate. The proposed budget should have given an increased focus on the sectors like education and health. The country is currently going through a demographic dividend era. The key thing for reaping the benefit of this dividend would be to increase the quality of education. A substantial increase in education and health sectors is necessary for attaining the Sustainable Development Goals (SDGs).

Emphasis should have been given on attracting the private sector investment. Increasing capacity of the National Board of Revenue (NBR), implementation of the VAT law, and identifying areas for expanding the tax net is critical for attaining the government’s increased revenue target.

Workers at 3,000 subcontracting RMG units in danger

Workers at more than 3,000 subcontracting readymade garment factories in Bangladesh have been working under dangerous conditions five years after Rana Plaza collapse as the factories still lack safety measures, according to a recent study of New York University. The study titled ‘Five Years After Rana Plaza: The Way Forward’ conducted by the NYU Stern Center for Business and Human Rights estimates that there are more than 3,000 subcontracting factories in the country and it will take $1.2 billion to remediate major life-threatening safety concerns in the units.
The report also says that there are more than 7,000 RMG factories across the country, of which 4,000 are covered by safety initiatives of two global buyers’ platforms and the government.
But the three initiatives still leave out a very large number of additional factories and their workers, it says.
According to the report, many of the left-out factories primarily do subcontracting work for export, or a combination of production for the local and global markets, and thus do not have direct relationships with the large Western buyers. Both the government and the country’s apparel exporters, however, have expressed their disagreements over the number of factories and subcontracting issues. The NYU Stern Center proposed $1.2 billion ‘shared responsibility’ model in which the government of Bangladesh and local suppliers will invite Western governments, brands and retailers, the World Bank and foundations to participate in a task force that will undertake a census of factories, assess the financial costs of fixing safety gaps and contribute to a fund to help meet this need. ‘Western consumers are the beneficiaries of the cheap clothes produced in Bangladesh. Therefore, it is incumbent on Western brands and retailers, as well as Western governments, to step up to the plate,’ the report observes.
Moinuddin Ahmed, acting president of Bangladesh Garment Manufacturers and Exporters Association, told New Age that the number of export-oriented garment factories was much lower than the number said in the report.
He claimed that almost all the garment factories were under the safety initiatives of buyers and the government and very few, which were already closed, were out of initiatives.
‘Most probably the garment manufacturers for local market have been counted in the number but the BGMEA is not responsible for the factories as they are not its members,’ Moinuddin noted.
Md Shamsuzzaman Bhuiyan, inspector general of the Department of Inspection for Factories and Establishments, also differed with the statistics of the study.
He claimed that highest 600 factories were out of safety inspection and the government already took initiative to bring the units under monitoring.
Shamsuzzaman, however, went to add that they were not considering the establishments as factories as they were supplying the local market only.
Comparing various databases, the NYU Stern Center has calculated the total number of RMG factories to be 7,000 as the government has not done any such census.
To calculate the number of subcontracting factories, the NYU Stern Center subtracted the sum of Accord/Alliance and National Initiative factories (4000) from the total number of factories.
It estimates remediation value at $413 million for the 1,650 national initiative factories while $750 million for 3,000 subcontracting factories.
‘In an ideal world, the Bangladeshi government would competently oversee the entire industry, without need of foreign intervention. The world, of course, is not ideal, and the government has not done its job vigorously. Known as the National Initiative, the government’s regulatory apparatus
for garment manufacturing has worked since Rana Plaza in cooperation with the International Labour Organization (ILO). Still, progress has been slow; information disclosures, sparse and sometimes inconsistent,’ the report continues.
It says that though the government and BGMEA claim that there is no unauthorised subcontracting in the country, the practice continues and shows no sign of disappearing.
The report finds that many small factories produce mostly for the domestic market and occasionally pick up subcontracting work from exporters.
The BGMEA acting president said that the member factories of the trade body were not engaged in any unauthorised subcontracting.
After the Rana Plaza building collapse in April 24, 2013, that killed more than 1,100 people, mostly garments workers, EU retailers formed Accord on fire and building safety in Bangladesh while North American brands formed Alliance for Bangladesh Worker Safety undertaking a five-year plan, which set timeframes and accountability for inspections and training and workers empowerment programmes.
The two platforms conducted safety inspection in some 2300 RMG factories.
At the same time, the government under the support of ILO conducted safety inspection in 1,490 factories.

The 5 Worst Foods To Eat If You Have Arthritis

Most people have no idea that eating the wrong foods can cause arthritis pain flare-ups.

That’s why I’ve prepared this article to walk you through the 5 Worst Foods to eat if you suffer from arthritis.

In just a few minutes from now, you’ll know how to steer clear of the 5 biggest “food landmines” that can sabotage your health and make your arthritis pain worse.

What you’re about to discover will probably be quite surprising. But more importantly, it will show you how to take control of your arthritis instead of having it take control of you.

And that’s not all. In addition to walking you through the “5 Worst Foods,” we’re also going to cover other items you need to know like:

• The unique “shift” your body makes during your mid-twenties that could be the culprit behind your arthritis pain. (Probably less than 1 in a 10,000 people know this.)
• The secret discovered by a little known New York doctor that will give you a HUGE advantage in your fight against arthritis. He discovered the switch you can “flip” inside your body to help make it start acting like it did when you were 25!
• The real reason that traditional “painkillers” don’t help your pain.
• I’ll reveal the “trouble making” vegetable that can actually make your arthritis pain worse! If you’ve always thought that greens are good for you, you’ll definitely want to read this.
• What special type of “super food” can actually counteract the damage of arthritis itself! (It’s amazing to understand how this works.)