FY25 budget: ex-minister Mannan pushes for eliminating VAT, tax from essentials

The former planning minister also advises the government to expand its family card programme for the low-income people

To fulfil its pledge to keep prices down in its election manifesto, former planning minister MA Mannan has advised the Awami League government to remove VAT and other taxes from essential commodities in the upcoming budget.

Mannan, an MP for four consecutive terms, was part of the cabinet in two terms. After the 10th national election in 2014, he became the state minister for planning. Prime Minister Sheikh Hasina later added finance to his portfolio.

After the 2018 general election, he was made planning minister, but dropped from the cabinet after the 12th parliamentary polls on Jan 7.

Known for his clean image in the previous government, he now chairs the parliamentary standing committee on the planning ministry, holding a ministerial position.

In a candid conversation with http://bdnews24.com, Mannan shared his thoughts about the national budget for 2024-25 fiscal year.

Besides controlling runaway inflation, the government should prioritise making the power supply system sustainable and “further strengthen” the rural health sector, Mannan said.

“I believe it has already become the priority for the government as it is the people who elect the government and the government can read the people’s minds. The government must combat the escalating prices of essentials. This is a public issue,” he said.

“The power sector should be made sustainable because that is also a popular issue. The rural health sector, especially the community clinics, should be strengthened. They must provide more free medicines,” he said.

To ease the growing pressure of cost of living on parents, the government should ensure free books, lessons and meals for children at school, Mannan said.

He said the supply of all daily necessities should be increased and kept undisrupted.

“Essential goods like rice, lentils, and edible oil should be free from VAT and tax. To be precise, access to these products should be free from any type of hassle. This is the first task for the government,” he said.

The former planning minister suggested increasing the number of beneficiaries of the family card programme by the Trading Corporation of Bangladesh or TCB.

Currently, 10 million families or 20 percent of the population use the cards to buy essential goods at subsidised rates. Mannan said 5 million more should be added to the list.

He said goods transportation by road has become better than before but could be developed further to make it quicker. This will drag down the prices of essentials, he believes.

FOCUS ON VILLAGES

When he held a minister’s office, Mannan travelled to his village whenever he got time. The Sunamganj-3 MP said he could spend more time in his village home now that he was not part of the cabinet.

He spoke to http://bdnews24.com over the phone from his village home. “The demands of the rural people have changed significantly,” he observed.

“People in rural areas are happy to have electricity. Now they want the electricity available for 24 hours. They endure the escalating prices of essentials, but want more [TCB] cards. Currently, there are 10 million cards given to the people, but they demand more people to get them. And they want the prices to drop.”

Mannan said that rural people want better education in schools and madrasas.

“This is their demand and I support the demand as well. These should be the priorities for the government.”

The former minister said the marginal groups of people also want peace, stability, and law and order.

“All the rural people want is law and order in the country. They want no theft and robbery, no one forcing them to do something and a stable environment to earn their living. To be precise, they want a stable government.”

People demand protection, they want quick justice, said Mannan. “They know that the government won’t feed them for free, hence they want a proper environment to work and earn.”

THE LAZY BUREAUCRACY

The implementation rate of the Annual Development Plan or ADP stood at 27 percent in the first seven months of the current fiscal year, the lowest in the last 12 years.

When asked about the issue, Mannan mentioned the lack of the workforce required to keep pace with the economic growth and also a national budget crunch.

“The economy is growing at a rate of 6 to 8 percent, but the number of people needed to work for this much growth has not increased."

“Some unnecessary people get into the crowd of bureaucracy even if you don't want it. This is the number one issue."

For them, the target set out in the budget could never be achieved, he said.

"But these problems are nothing unique. We know this will happen. These issues can be settled. A stable government can manage it if they work properly.”

When discussing the commitment of government employees, the former planning minister expressed concerns about the timely availability of funds, which affects their work.

"Some of them do not release the funds while others consistently arrive late to work. They remain lazy. Some officers don't stay in the villages or areas where they are assigned, preferring instead to live in urban areas, leaving the rural populations vulnerable."

He criticised these officers for drawing salaries without effectively serving the people, contributing to significant systemic issues.

He also highlighted other problems evident in foreign loan-run projects. "They have to fulfil the requirements of the loan. Sometimes the donors visit the projects and they follow their schedule. The donors’ rules are different from ours."

Mannan said the 27 percent ADP implementation in seven months could still be 90-92 percent at the end.

"This is not magic. This must happen. The bills get cleared at the later part of the year."

'NO PROJECT JUST FOR SHOW-OFF'

Personally, Mannan preferred the government taking mega projects but suggested considering people's welfare first. "The mega projects that bring people's welfare."

He gave the example of the Padma Bridge that has helped 60 million people, the Dhaka Metro Rail that has brought a respite from traffic jams and Dhaka-Cox's Bazar Railway that eased travelling for people.

“I will be happy to see such projects. I have no issue with them. But, we, as a society, must take a stance against projects that are meant for show-off only; that will bring no return.”

To bring transparency in the megaprojects, the bureaucracy should be revamped, the former minister said.

“Due to the bureaucratic red tapes, many unnecessary costs come up. They come up with 20 tonnes when only 10 tonnes are needed. The government work orders should be issued electronically or digitally, not manually.”

He stressed the need for fixing deadlines for the projects. “Everyone should finish their work by the deadline or get slapped with a fine,” he said.

“Whether it’s me, a clerk, or a peon, everyone has to complete their work on time and digitally. This will enhance the speed of our work.”

ECONOMIC CRISIS ‘ISN’T ABNORMAL’

The economic crisis Bangladesh is facing after the coronavirus pandemic and the Russia-Ukraine war is ‘not abnormal’, according to Mannan.

“Ours is a developing economy and it faces pressure all the time. This is like a family struggling to meet all ends. This isn't undue pressure. We could become an almost dead economy if this pressure didn’t exist. Since our economy is growing, we’re facing such pressures.”

“This is nothing abnormal. Even the developed countries have gone through this. As our people are well aware and active on Facebook and other social media, we know more.Things were not like this in the last century. There’s nothing to be surprised at.”

Mannan suggested curbing the misuse of money, stopping corruption and opting for austerity.

He said it is important to stop extravagance in a family, a society and a nation. “If we prevent corruption, stop misuse of money and practise austerity, we’ll be able to overcome the problems.”

“Another important point is that we need to increase the investment in the country. But that too, for the projects that bring positive return,” he said.

REDUCE PRESSURE OF FOREIGN LOAN

Although the country depends on foreign loans in most of the important sectors, the former minister highlighted the need for strengthening the national economy and sending more skilled workforce abroad.

“I’m not against taking loans. We can’t implement good projects without loans. We need credit to implement the projects on education, health, connectivity, and power. But of course, we need to increase the implementation rate, curb any misappropriation and speed up work.”

“We have to increase the production of rice, lentils, fish, and poultry, so we can consume and export the surplus produce. We need to boost industrial production as well and explore other sectors.”

Mannan said more people should be provided with the opportunities to go abroad after training.

He said the workers earn less if they are not trained before going abroad. “They should be trained even if it’s a month-long training.”

[Writing in English by Sabrina Karim Murshed; editing by Osham-ul-Sufian Talukder]