Money laundering in any way is never justifiable

Finance Minister Abul Hasan Mahmood Ali presented the proposed budget for the fiscal year 2024-25 in the National Parliament today (June 06). This marked Bangladesh's 53rd full-fledged budget and the 16th consecutive budget under the present government. It was also the first budget presented by Finance Minister Abul Hasan Mahmood Ali.

For a developing country like Bangladesh, achieving a balance between income and expenditure in the budget is always a challenging task. The adoption of a budget does not always satisfy all sectors of society. Crafting an acceptable and disciplined budget for the upcoming fiscal year, considering global and internal economic realities, is indeed a daunting task. In the past, Bangladesh has never adopted a budget under such complex circumstances.

Particularly, several complex issues have emerged in the country's economy, posing challenges that may not be easily overcome. Yet, the budget proposal has been presented. The most significant challenge in the proposed budget is to sustainably manage the existing high inflation over the past two years or more. The global post-Ukraine war inflation has created a significant economic burden. While many countries have managed to tolerate high inflation to a considerable extent, Bangladesh has not shown minimum success in this regard.

Efforts have been made to reduce inflation by reducing imports in various sectors. However, this initiative has backfired in many areas. Economists emphasize the importance of managing high inflation at this moment. They argue that due to high inflation, ordinary people are experiencing significant suffering. Therefore, reducing high inflation to a tolerable level at this moment is the most critical aspect of the economy.

The proposed budget for the new fiscal year presented in the National Parliament can be evaluated in various ways. It reflects the continuity of the current government's economic and social policies. It cannot be denied that the most challenging task for the government in the new fiscal year will be to mitigate the existing high inflation and devise measures to reduce the cost of living for the people. The government has taken various initiatives to reduce inflation by controlling imports and expenditures. While these initiatives have somewhat helped reduce inflation, there have also been negative consequences.

Controlling inflation remains the biggest challenge for the upcoming fiscal year. Efforts must be made to identify the logical causes of high inflation and address them. Many argue that inflation has increased due to the appreciation of the US dollar exchange rate. However, this cannot be entirely accepted. Because Bangladesh imports only 25% of its total goods, while the remaining 75% are produced locally. Yet, inflation is increasing due to the powerful syndicates in the market. Their regulation is necessary.

A significant limitation of Bangladesh's economy is its inability to collect the desired amount of tax. Currently, Bangladesh's tax-GDP ratio remains below 8%. However, compared to our neighboring countries, the tax-GDP ratios of their economies are much higher than Bangladesh's. If tax collection does not increase, the country becomes excessively dependent on foreign loans, which is not at all desirable.

Author: Member of Parliament, Former Foreign Minister, Government of the People's Republic of Bangladesh.
Transcribe: M A Khaleque