New Delhi, June 13 (IANS) Bangladesh’s official budget and revenue shortfalls may mask a deeper crisis in ethics and good governance, and the country is expected to continue in the same trend unless “corruption and extraction are reduced”, a report has said.

The report from Bangladesh-based The Business Standard argued that the estimated losses from corruption, overpricing, inefficiency, and systemic extraction could possibly exceed the budget deficit itself.

The National Board of Revenue has assigned a collection target of about Tk 6 lakh crore (Bangladeshi taka) for the country, but analysts warned that a substantial shortfall has been occurring repeatedly.

The government has proposed a budget of approximately Tk 9.3 lakh crore and projected a fiscal deficit of roughly Tk 2.43 lakh crore, equivalent to about 3.7 per cent of GDP.

Recent NBR deficits have ranged from Tk 40,000 crore to more than Tk 1 lakh crore.

Though the country faces three deficits: the budget deficit, the revenue deficit and ‘EGG deficit’ — the deficit in ethics and good governance — the third one is the real problem, the report said.

Overlooking this real problem post-budget public discussion revolves around the size of the budget, the fiscal deficit, the revenue target, the revenue shortfall, and the amount of borrowing needed to bridge the gap, it noted.

Some analysts said that about 40 per cent of public expenditure may be lost to extraction, while other studies pointed to lower but still substantial leakage.

“Much of the budget deficit appears less as an economic necessity and more as a phantom—a fiscal mirage created by systematic, institutionalised extraction within an elite-captured system,” the report argued.

The media house said that substantial wealth exists in Bangladesh as luxury consumption continues to grow along with high-end real estate. But misgovernance has led to a large portion of taxable wealth kept outside the effective reach of the tax system.

—IANS

aar/ag