The proposed budget lacks prudent and farsighted solutions to the current challenges except it earmarks an ambitious target of uplifting private investment amidst lack of business confidence, said Unnayan Onneshan (UO) in its rapid assessment of the proposed national budget for the FY 2016-17. The independent multidisciplinary think-tank Unnayan Onneshan (UO) stated that the proposed budgetary measures for the year of 2016-17 fall flat in addressing the exceptional circumstances of investment stagnation, infrastructural deficit, rising unemployment and escalating inequality amidst institutional fragility.
Unnayan Onneshan pointed out that private investment has been remaining stagnant and has stood at 22.07 percent of GDP in FY 2014-15 and 21.78 percent in FY 2015-16, while increase in public investment from 6.82 percent in FY 2014-15 to 7.6 percent in FY 2015-16 has not succeed to create much needed crowding in of private investment.
Observing the declining trend in national savings, the research organisation found that total national savings stood at 29.23 percent of GDP in FY 2013-14, 29.02 percent in FY 2014-15, and 30.08 percent in FY 2015-16, and warns that such trend may induce national output to decline.
Pointing to the underachievement of NBR tax revenue collection in recent years, the UO doubted that the target of collecting NBR tax revenue of Tk. 203152 crore may not be feasible in FY2016-17, whereas a gap of Tk. 26370 crore has been found between the budget and revised NBR tax in FY2015-16.
Taking account of slow implementation against the planned duration of the infrastructure development projects, the UO commented that increase in allocation implies rising cost induced economic rent which has made the public investments inefficient.
Referring to the poor implementation of annual development program (ADP) in FY 2015-16, the research organisation warned that the ADP allocation of Tk. 110700 crore in the FY2016-17 may remain underutilised as only 50.18 percent of total ADP allocation of Tk. 97000 crore in FY2015-16 has been implemented until April 2016.
Calling for prudent and farsighted fiscal management, the research organisation stated that proposed actions are inadequate to bring fiscal discipline in the management of deficit, debt and subsidy one the one hand and to increase income in the absence of radical reforms in the tax system on the other.