Proposed budget fails to shield inflation-hit middle-class

The proposed budget fails to address the challenging situation the middle-income people have been going through. What we expected from it is that a tax-free income ceiling would be raised so that middle-income people get some relief. But it has not been done.

The gas price was raised a few days ago. But the allocation for subsidies is not specified. I have seen that Tk14,000 crore will be added as a subsidy. Of the allocation, Tk4,000 crore will be shelved for agriculture. This will be good.

Around Tk15,000 crore is proposed for investing in shares and equity. I think, spending in subsidy is more crucial than investment on share and equity for the upcoming fiscal year. 

Apparently, it seems that the allocation for the social safety net has increased. In reality, if the allocation for government employees' pension is separated, the social safety net basket will get Tk3,000 less than the outgoing fiscal.

Similarly, the Open Market Sales programme will lose Tk223 crore in allocation compared to the outgoing fiscal and it will harm the beneficiaries from lower-middle-income people. Food distribution target for the coming fiscal is reduced by 1.80 lakh tonne.

The finance minister has hinted that oil, gas, power and fertiliser tariffs will be adjusted gradually. The move will add more load on the shoulders of middle-income people.

There are several offers or incentives for the local industry. But lower-middle-income people will not get any benefit from that.

On the other hand, big corporates will benefit with tax rebates. Local industry operators will embrace additional support and the exporters will be substantially relieved of tax burden. Giants will get more benefits.

The proposed budget offers cushions for the tax evaders and money launders.

Overall, the budget proposal seems a contrast to the challenging situation the finance minister mentioned in his speech. I do not find anybody to guard for the middle-income people in this challenging time.

Preparing the 2022-23 budget proposal was indeed a challenging task for the finance minister. Because this was a matter of curiosity how he was going to stand by the people affected by the spiking inflation. The proposed budget has kept middle class people out of the focus mostly.

We hoped about a budget relieving the inflation-hit people, but the proposed budget fails to fulfil that.

Towfiqul Islam Khan is a senior research fellow at Centre for Policy Dialogue (CPD)