They stressed the need for improving expenditure quality under the Annual Development Programme (ADP), saying that positive steps in some areas will make no improvement if the issues like governance, corruption and violence were not properly addressed.

On the other hand, greater emphasis on export-oriented industries and the agriculture sector are the positive sides of the proposed budget.

President of Bangladesh Economic Association (BEA) Qazi Kholiquzzaman Ahmad said the proposed budget did not provide any sense of direction for reducing discrimination in society. "We have to look at the policy package. It will not lead to any improvement if steps are not taken to improve governance, curb corruption and control violence."

Referring to the finance minister's public statement that the government has to spend around Tk 10 crore for constructing a kilometer of road against the actual cost of Tk two crore, the BEA president said it was very essential to improve the quality of expenditure.

However, the BEA president hailed the proposed measures like export diversification and highest allocation for the education sector.

Professor Muzaffar Ahmed of Dhaka University said the finance minister has cut allocation at the primary level of education and the allocation proposed for the health sector would be eaten up by inflation.

Proper evaluation of the projects worth Tk14, 000 crore of the ADP may be questioned because these were approved at the National Economic Council (NEC) in a day, he said adding that if these were not properly evaluated, the quality of ADP expenditure would be affected.

"I think this budget reflects Saifur Rahman's shift from his free trade inclination to a degree of protection. This time the pendulum swings more towards import substitution. This is a clear policy reversal from the previous de-industrialization policy perused in the 90s," he added.

However, he said more emphasis on and fund allocation for the agriculture sector is a positive aspect of the proposed budget.

President of Bangladesh Agro-Processors' Association (BAPA) Amjad Khan Chowdhury termed the proposed budget a pragmatic and development-oriented one with a strong overtone of self-reliance.

The impetus to value added agro-based industry has been maintained somewhat and some of the measures announced in this connection are commendable and will stimulate employment generation in the largest and most important agriculture sector and agro-based industry, he said in a statement.

Chowdhury said a cursory reference to the budget speech would however not reveal that most of the major impediments to the growth of agro-based industries have been addressed in it.

The Dhaka Chamber of Commerce and Industry (DCCI) appreciated the proposal for imposition of supplementary duties on certain import items in the proposed budget.

"It will help protect local import-substituting industries," said the DCCI in a statement yesterday.

However, the statement said enhancement of customs and supplementary duties on new environment-friendly vehicles, taxicabs, buses, three-wheelers, motorcycles and bicycles would leave a negative impact on the economy.

It said if wastes and abuses of the government's revenue expenditure could not be checked, the process of domestic resources mobilisation would fail.

Exemption of taxes from the textiles, readymade garment (RMG) and agro-based sectors were also hailed by the DCCI.

Bangladesh Chamber of Industries (BCI) appreciated the proposed budget for raising the subsidy on agriculture to Tk 300 crore, allocating Tk 345 crores in micro-credit projects and increasing the allocation for modernising the police force.

Chairman of Dhaka Stock Exchange Ltd Ahmed Iqbal Hasan hailed tax exemption from dividend income and increase in the gap between listed and non-listed companies to 7.5 per cent.

"These are investment-friendly steps and investors will be encouraged with these incentives," he added.

President of the Bangladesh Reconditioned Vehicles Importers and Dealers Association (BARVIDA), Abdul Mannan Chowdhury, said allowing the use of three-year-old reconditioned vehicles as taxicabs with duty facility in the next fiscal year would benefit investors.

Bangladesh Optical Industries and Traders Association applauded the proposed budget for reducing duty on raw materials used for making frames of spectacles.

UNB adds: The proposed budget has failed to declare a much-needed crusade against corruption and terrorism, eminent economist Dr Atiur Rahman said.

Atiur said there were many measures in the budget to move in the right direction for areas like agriculture, agro-processing industry, information technology, share market, women empowerment, environment, rationalisation of taxation and tax administration. But, he said, "Everything depends on good governance."

Dr Atiur, a senior research fellow of Bangladesh Institute of Development Studies (BIDS) and known for his pro-poor views, said pro-poor policy measures were not good enough although it was supposed to be as per the PRSP.

He said the budget lacks clear announcement to increase assets for the poor although it said the lion's share (one-third) of annual development programme (ADP) would go to poverty alleviation projects.

He also described the budget as "huge" as the figure would go up to around 55,000 crore if the amount for debt servicing of around Tk 3,000 is added.

Atiur assumed that the revenue target might be achieved but it would have to depend on foreign loans of around Tk 9,000 crore and a domestic borrowing of Tk 6,000 crore to meet the "huge" deficit.

Economist Dr Binayak Sen said for the first time a budget has been framed under a medium-term development outline, setting year-on-year targets for growth and budget deficit.

"If all these targets are not tailored under a medium-term goal, annual budgets are likely to be disintegrated and scattered without having any link," Dr Sen.

Having a target-oriented medium-term approach, Dr Sen said, was a step towards restoring discipline in the traditional process of planning without integration.

Making an evaluation of the outgoing fiscal year, he said the government had little scope to go for expansionary policies in the current fiscal that went through many global economic upheavals.

Backed by a favourable macroeconomic stability and positive factors like a better reserve position, the government has taken an investment-oriented expansionary policy with substantial allocations for public investment in social sectors and infrastructures.

Even if only 8 per cent of increased development expenditures is utilised properly, the economy would see a close to 6 per cent growth next fiscal, he hoped.