The proposed budget for FY 2009-10 is "ambitious" in terms of policies but "conservative" regarding macroeconomic projections, says the Centre for Policy Dialogue (CPD).

The growth target was not clear and could have been higher in the changed scenario under a democratic regime, the private research think-tank said at a post-budget press briefing on Friday.

CPD's honorary fellow and former executive director Dr Debapriya Bhattacharya said the targeted GDP growth of 5.5 percent was 'surprising' because 5.9 percent growth was achieved last year in spite of several setbacks. "From this perspective the budget is not ambitious; rather it is far from reality." He added indications were that the country was going backwards.

"The two defining goals for the government would be meeting high public expectation and addressing the global recession," Bhattacharya said. The CPD review said that the budget reflected the pledges of the ruling Awami League in the election manifesto.

However, it added, promises of agriculture development and food security seemed to be lost in terms of allocation. "Total allocation for agriculture and allied sectors is 14 percent lower than the revised budget of FY 2008-09," said the CPD fellow.

The budget proposed to set aside Tk 8,950 crore for the sector including crop, livestock, fisheries, forestry, land and water resources. Meanwhile, the public expenditure share for industry and economic services also slumped about 13 percent.

He also termed the public expenditure that is 16.6 percent of the GDP "low " compared with the neighbouring regions. "Much more of it is needed in Bangladesh where almost 40 percent people are poor." The annual development programme of Tk 30,500 crore was also believed to be inadequate: "Not very much...for the people of Bangladesh it should have been more."

CPD, however, said in its review that the projected ADP was "overblown" in the context of implementation capacity. It pointed out that of the 886 projects in the ADP of FY 2009-10, only 35 were new and the rest were carryovers. "Without these [carryovers] the new ADP would have been Tk 26,895 crore," Bhattacharya said..

He criticised imposition of 25 percent tax on mobile phones saying it would boost the grey market once again like in the past. "Everyone would start bringing a mobile phone in his pocket while coming back from abroad."

Speaking on the much-talked issue of investing undisclosed money, the former CPD executive director said the move would remove the distinction between legally earned undisclosed income and illegal earned undisclosed income.

"The situation is if you are honest you pay 25 percent taxes. Otherwise, the so-called black money holders get to pay only 10 percent."

Ensuring proper utilisation of surplus national savings and foreign aid in pipeline, maintaining complementary macroeconomic framework, fiscal and monetary policies and enhancing ministries' capacity to utilise their allocated funds are also the key challenges facing the government, it added.