Festivals Are The Key

Festive mood and bonus money Bring pace to dull economy.

Seasonal festivals turn out to be boon for the economy. Widespread participation in the festival accelerates sales. Festival transaction constitutes major part of the annual transaction. Festival sales boost demand in fixed season and generate much needed revenue to the shop owners. Two Eids and Bengali new year (Pohela Baishakh)celebration are among the major festivals that shape the annual sales. Back to back celebration of Eid and Pohela Boishakh to some extent subdued the economy all these years. As the gap between lunar calendar driven Eid and Bengali calendar driven Pohela Boishakh widens, impact of the two on the economy also deepens.

Govt bonus to public servants plays a key role in rejuvenating the festival economy. In addition, many private organizations follow govt step and provide special bonus during the Pohela Boishakh. In brief, this bonus and allowance make a huge impact to the growing of the festival economy. Though no formal study is initiated, news reports suggest a quarter of annual sales take place during the Pohela Boishakh. From food to handicrafts, from clothes to entertainment ,hardly any sector remains untouched by the festive mood.

Taking enthusiasm into account, other festivals could play major role in bringing pace to economy. Aiming at festivals stretching all around the year is the key. Autumn is coincided with the harvesting season. So celebrating Nobanno or Autumn festival,which is held in November, will give people another occasion to celebrate and spend money. Cash allowance to salary men will also augment sales in this time. Winter is considered an ideal time for celebration. Most of the educational institutions remain closed. Winter festival can be thought of as the desired festival of this time. Since the dry season is an ideal season to travel around the country, winter can be considered the chosen season to boost tourism at home. Tourism bonus to salary men can make more people travel different parts of the country, ending bad spell for the domestic tourism industry.

Festive mood proves to be great catalyst to increase sales. Capitalizing the festivals all year around could rejuvenate the dull economy. Apart from the two Eids, Pohela Boishakh in April, Nobanno in November and Winter festival in December can provide year round sales boom. For that to happen, cash bonus to public and private employees is a must. This kind of sales push during festivals will definitely move the economy forward to reach the desired destination.

La Semaine Dernière A Mes Yeux

(11 avril --- 17 avril)

Cliquez pour voir/cacher

Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
11	Pain,Pois blanc	Riz,Yard long beans,Sec ruban poisson avec haricot rouge	Riz,Yard long beans,Sec ruban poisson avec haricot rouge	Patate douce
12	Pain, Pois blanc	Riz,Purée de pomme de terre,Latya poisson	Riz,Purée de pomme de terre,Sec ruban poisson avec haricot rouge,Latya poisson	Pois chiches,Riz gonflé
13	Pain,Papaye-Pomme de Terre bhaji	Riz,Soupe aux lentilles,Gombo,Petit poisson	Riz,Petit poisson,Purée de pomme de terre	Patate douce
14	Riz rassis,Pianju,Purée de pomme de terre,Puntio barbe poisson	Riz,Purée de pomme de terre,Soupe aux lentilles,Petit poisson	Riz,Lait,Banane	Banane,Sucreries
15	Paratha,Œuf	Riz,Soupe aux lentilles,Latya poisson,Feuilles de jute	Riz,Latya poisson,Soupe aux lentilles,Feuilles de jute	Patate douce

Revenue Reform Remains Unimplemented

Throwing the revenue reform into the gutter Is not silly but a serious matter.

It appears that the ruling party has kept its words by not implementing the revenue reform. At the heart of this reform is the separation between revenue policy department and revenue implementation department. Past interim govt even made Revenue Policy and Revenue Administration Ordinance 2025 (see http://bdlaws.minlaw.gov.bd/act-details-1537.html),which is in line with the IMF reform list. Incumbent Finance Minister before the election said his party would support independence of the central bank but oppose splitting the NBR into two bodies.

What does this new ordinance contain? Govt will appoint people to revenue policy department. Tax Appellate Tribunal and Customs, Excise and VAT Appellate Tribunal will be under the auspices of revenue policy department. Its jobs include formulation of tax policy, raising/lowering taxes, tax law amendment, evaluation of tax management, negotiations on international customs agreement, research, revenue forecast and estimation among other things.

Staffs of revenue administration department will be drawn from BCS cadres. Revenue administration is tasked with implementation of various tax laws and regulations, implementation of international customs agreement, implementation of international agreement on abolition of double taxation, staff management, making and implementing budget for the department, initiating tax awareness building campaign,undertaking audit and surveillance programs etc.

The splitting of the NBR will make the policy department's influence weaker over the administration department. At present NBR could impose excise duties or [raise] taxes in the middle of the year in a bid to meet the revenue target. The move ultimately increases cost of doing business. Many investment initiatives sustain cost overrun because of unpredictable nature of tax policies. It is anticipated that NBR reform would bring predictability in tax policies [by] not raising cost of businesses in a given year.

And most importantly the reform may put an end to policies driven by political vendetta. The NBR Order of 1972 makes NBR a powerful institution. If one reads the clause #4 of The NBR Order, then one can have some idea about the power wielded by the NBR. The clause states that govt can make rules at its whims and NBR officers can take actions whatever they wish before the rule is actually made. Those actions before the rule cannot be put under scanner later (see The NBR Order 1972, https://nbr.gov.bd/uploads/acts/9.pdf). In the past we saw how the NBR was used to harass the political opponent. Fear is that outrightly throwing the idea of splitting the NBR may continue political vendetta driven actions.

Revenue reform will not only put restraint over overwhelming power of NBR,it will also bring the much needed predictability about revenue policymaking. And it will benefit both business and individual alike in terms of giving idea about the vernacular cost. At the same time, it will improve the political environment by ending use of NBR as a docile instrument to harass others. But by not making the ordinance into a law , govt throws cold water into such bright possibilities. I hope govt will reconsider its decision.

La Semaine Dernière A Mes Yeux

(04 avril --- 10 avril)

Cliquez pour voir/cacher

Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
04	Pain,Pois blanc,Œuf	Riz,Ruhi, Aubergine,Soupe aux lentilles,Pois blanc	Riz,Ruhi,Aubergine,Poulet	Beguni,Pois chiches,Yaourt sucré, Sucreries, Malta,Butter toast
05	Pain, Yaourt sucré, Sucreries	Pilaf,Poulet	Riz,Poulet,Ruhi,Aubergine	Mangue,Sucreries
06	Pain,Œuf	Riz,Soupe aux haricots mungo,Poulet,Yardlong beans	Riz,Soupe aux haricots mungo,Yardlong beans,Pianju	Sucreries
07	Pain,Œuf,Soupe aux haricots mungo	Riz,Yardlong beans,Soupe aux lentilles,Crevettes	Riz,Yardlong beans,Soupe aux lentilles,Crevettes	Sucreries
08	Pain,Œuf,Pois blanc	Riz,Ruhi,Crevettes,Soupe aux lentilles	Riz,Ruhi,Soupe aux lentilles	---
09	Pain,Œuf,Pois blanc	Riz,Soupe aux lentilles,Petit poisson,Purée de pomme de terre,Épinard d'eau	Riz,Purée de pomme de terre,Soupe aux lentilles,Petit poisson	Banane
10	Pain,Banane ,Lait	Riz,Ruhi,Petit poisson,Yardlong beans,Soupe aux lentilles	Riz,Lait,Banane,Œuf	Banane,Riz gonflé,Pois chiches,Pianju

Rising Public Debt Clips The Wings

The woe called rising public debt Makes difficult choices amid revenue regret.

Govt is planning to seek $2 billion foreign credit to mitigate challenges of energy security caused by ongoing war. Meanwhile, govt's debt service management has already crossed $3 billion matching the incoming flow of aid this fiscal year. Asian Development Bank hinted that it [would] provide credit to meet the emerging need from oil price shock. Ailing economy needs further cash to recover. And it is coming from foreign credit. Bangladesh's overall foreign credit stands at $113.51 billion at the end of December 2025. Govt borrowing accounts for 82% of the total foreign credit. Private sector accounts for the rest.(Source: Bangladesh Bank)

According to a study by IMF,global public debt reached 93.9% of GDP and projected to cross 100% by 2028(see "High Debt,Hard Choices" by Era Dabla-Norris and Rodrigo Valdes,March 2026,IMF,https://www.imf.org/en/publications/fandd/issues/2026/03/high-debt-hard-choices-era-dabla-norris). As the public debt rises,so does the interest payment. This fiscal year alone govt paid $950 million as interest payment. By the end of this fiscal year it would cross the billion [dollar] mark. The situation makes the task of resource mobilization even harder. The IMF study also shows that interest payments take away 21% of tax revenues in low income countries. This money could have been spent on social security programs and development programs.

Tax revenues that help financing the development and social security programs are not in a good shape. Against a target of Tk 3.25 trillion ,NBR managed to collect Tk 2.54 trillion of revenue till February this year, registering a shortfall of Tk 714 billion(Source: NBR). This year revenue target is set at Tk 5.54 trillion. Failure to meet revenue target means the money has to come from somewhere else. Borrowing is a popular option. As Bangladesh is scheduled to graduate from LDC countries within two years, overseas borrowing will be costly for us. Battered economy, poor credit ratings have already made costly the foreign credit. Too much borrowing from domestic sources translates into less credit to private sector. What is worrying too much borrowing amid high debt and inadequate revenue has consequences. The IMF study cautions:

"But today, the era of easy choices is over. Every dollar a government borrows without matching revenue implies higher taxes or lower spending in the future, at least to cover the additional interest the new debt generates. Beyond a certain point, more borrowing forces painful decisions—through austerity, inflation, financial repression, or even default."

Amid the grim fiscal situation, govt undertakes ambitious social security programs where chances of leakages are very high. Previous social security programs were not leakages free. Given no dramatic improvement in governance in the last one year, why will these new ones be different? Meanwhile, borrowed money will finance the deficit budget and tax revenues will go for paying the rising debt instead of development or social security programs. Earlier we used to take debt to finance various programs [aimed] for people and capacity building. Gradually we are entering into a phase where we need debt to pay older debts and interests. Social welfare, capacity building, human development and investment in infrastructure are [going to be] some of the badly hit areas. We need to check our spending and require serious commitment to reforms.

La Semaine Dernière A Mes Yeux

(28 mars --- 03 avril)

Cliquez pour voir/cacher

Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
28	Pain,Poulet,Œuf	Riz,Ruhi,Moringa avec citrouilles,Gourde serpent,Courage amère,Soupe aux lentilles	Riz,Ruhi,Soupe aux lentilles,Courge amère,Gourde serpent	Vermicelles,Poa pitha
29	Pain, poulet	Riz,Beans,Petit poisson	Riz,Beans,Pianju(depuis marché),Œuf	Poa pitha
30	Pain,Gourde serpent	Riz,Feuilles de Moringa, Citrouilles,Pied de poulet	Riz,Poulet,Feuilles de moringa	Pois chiches,Riz gonflé
31	Khichuri,Œuf	Riz,Épinard malabar,Petit poisson	Riz,Épinard malabar,Petit poisson,Pois chiches	Vermicelles
01	Pain,Poulet,Œuf	Riz,Gangetic ailia poisson,Gourde serpent,Soupe aux haricots mungo	Riz,Soupe aux haricots mungo,Potato bhaji,Petit poisson	Vermicelles,Puri,Patate douce
02	Pain,Potato bhaji	Riz,Soupe aux haricots mungo,Poulet	Riz,Soupe aux lentilles,Potato bhaji,Petit poisson	Jhalmuri,Pianju,Poire,Patate douce
03	Pain,Poulet	Riz,Papaye,Pomme de terre,Soupe aux lentilles	Riz,Soupe aux lentilles,Papaye,Pomme de terre,Beguni,Pois blanc	Pois chiches,Riz gonflé,Poire,Pastèque,Ananas,Malta

Formalizing Festival Economy

Formalizing our festival economy Boost sales and lower revenue agony.

Eids have always been great drivers of augmenting domestic sales. This Eid is no different. Despite slow improvement in law & order, Eid economy is doing well according to some news reports. There has been no formal study of the size of Eid economy. Platform of shop owners claims it would be around Tk 3 trillion. It maybe an exaggerated figure. Unfortunately we do not have any market research institution that could corroborate the claim. Such institution could initiate a study and come up with the [approximate] size of Eid economy.

This kind of study helps policy intervention. So that govt incentives fall into the right hands. Policy makers will also have an idea about flow of money and links between key sectors. Now only news reports are key sources of this information. Govt can help float this kind of market research institution through public private partnership.

Undocumented transaction in many shops is an obstacle estimating true figure of festival economy. Currently there are 2.6 million shops across the country according to the platform of shop owners. But many do not have business identification number (BIN), which is required for paying VAT(see "Subdued Festival Economy" published here on March 23,2025.https://hoquestake.blogspot.com/2025/03/subdued-festival-economy.html?m=1). So govt does not get enough revenue from transactions take place during the festivals. Till March, revenue shortfall reached Tk 714 billion. If the shops were BIN registered , govt would get enough revenue just from the shop owners.

Moreover, revenue shortfall indicates govt may further borrow from the banks ,lowering the share of private credit. Squeezed private credit stalls expansion/growth of businesses ahead of major festivals. If funds like Equity And Entrepreneurship Fund (EEF),which remains unused throughout the year, of the central bank becomes available for shop owners during key festivals, then it will have major impact on the growth of these shops.

Another thing I notice is that govt provides bonuses to public servants during festivals of Eid and Bengali new year. This policy also influences private sector to give bonuses during the two major events. Altogether the policy boosts sales in the festival seasons. Similar kind of incentives given six months later may also increase sales later period of the year,which usually see dull period in sales revenue. Celebrating Autumn, Winter may be the occasions to choose for.

Informal nature of our festivals fails the govt to tap the potentials from them. They are great drivers of generating sales demand and growth of SME businesses. Bringing them into a formal structure will help govt to keep a close tab on the flow of money and augment the tax revenue.