Budget pro-business, but incentives need monitoring

From an economic perspective, this is a business-friendly, pro-people, and inclusive budget. The objectives outlined within it are commendable, particularly in sectors such as education. However, as is often the case, the real challenge lies in its implementation.

One notable aspect of the budget is its proposal to utilise the stock market as an alternative source of financing. This is a relatively new approach and not something we have seen emphasised in previous budgets. 

However, this raises an important question. We have already seen banks gravitate towards Treasury bills because of their attractive returns and lower risks. If investors similarly favour government instruments over productive investments, the intended outcomes of these measures may not materialise.

This is particularly important for private-sector credit growth. If private-sector borrowing becomes squeezed, employment generation could suffer as a result. In that scenario, we may not see the level of job creation that policymakers anticipate.

The introduction of digital cards and a more technology-driven distribution system is a positive step. If the loopholes that previously existed in social protection programmes can be eliminated and the benefits reach the intended recipients directly, the initiative could prove highly effective.

Similarly, measures aimed at reducing the cost of living are welcome. However, announcing tax reductions or policy incentives is one thing; ensuring that their benefits are reflected in market prices is another. Without a robust monitoring and accountability framework, consumers may not experience the intended relief. This remains a critical issue.

Another important area is industrial growth and employment generation. Existing factories and facilities that already have utility connections and infrastructure in place should be utilised more efficiently and in a targeted manner. Making better use of these existing resources could help stimulate investment and job creation much more quickly.

Overall, it is a very strong budget. However, its success will depend on three key factors: effective monitoring, strict accountability, and ensuring that government expenditure remains within its planned limits without overrunning. If these conditions are met, we are likely to see the desired outcomes. The projected fiscal deficit of around 3.6% also appears manageable.

Shams Mahmud spoke to TBS' Shadique Mahbub Islam over the phone.