Customers are making choices about air conditioners at a showroom at Stadium Market in the capital on Tuesday. People are flocking to electronic product markets, anticipating a price surge following the government’s budget declarations. — SUN PHOTO

Experts predict that the fiscal year 2023-24’s national budget will prioritize the public’s interest, addressing macroeconomic hurdles in the run-up to the general election.

Notably, the economists, including a former central bank governor, called for easing the tax burden on ordinary citizens in a pre-budget discussion with the Daily Sun.

Dr. Atiur Rahman, former governor of Bangladesh Bank, said the government’s upcoming budget is likely to enhance the social safety net and offer tax advantages to lower-income groups.

“The government must adopt an appropriate fiscal strategy in line with evolving global conditions, particularly by extending more social security support amid high inflation. The budget must be prudent and frugal, in keeping with the adage ‘cut your coat according to your cloth’,” Rahman told the Daily Sun.

Finance Minister Mustafa Kamal is due to present the Tk 7.55 trillion budget to parliament on Thursday. The budget projects a higher GDP growth rate of 7.5 percent and aims to cap inflation at 6 percent in the forthcoming fiscal year.

Dr. Rahman is hopeful that the budget will indicate a transition to market-driven solutions for both interest rates and exchange rates.

According to Dr. Rahman, the tax-to-GDP ratio, currently stagnating around 10 percent, could easily rise to 15 percent by bolstering revenue administration and accelerating system digitization.

The former central bank governor reaffirms his advocacy for policy support to agriculture as the economy’s pillar, ensuring the country’s food security.

“The government’s recent prioritization of agriculture through sensible policies should continue. Consideration could be given to budgetary incentives to promote the use of solar irrigation pumps, which would reduce reliance on fossil fuels for irrigation in the long term, thereby shielding the agriculture sector and the broader economy from fuel price fluctuations,” he added.

Eminent economist Dr. Zaid Bakht aligns with Dr. Rahman’s view, emphasizing the necessity to increase the Tax-GDP ratio as the country moves towards becoming a developed nation.

“The market is under inflation pressure. To stabilize macroeconomic indicators, public spending needs to be controlled based on assessments. The government should allocate funds for infrastructure after evaluating project progress, or the funds will remain idle. Priority should be given to sectors generating employment,” stated Dr. Zaid, Chairman of Agrani Bank.

According to the former Research Director of the Bangladesh Institute of Development Studies, financial account stress won’t ease soon due to pressures on foreign currency reserves.