ASA UNIVERSITY BANGLADESH

Assignment on:
The Impact & Challenges of Digital Technologies on Marketing Course Code: MKT-413 Course Title: Consumer Behavior

Prepared For:
Mr. Firoz-Al-Mamun Course Instructor, Faculty of Business ASA University Bangladesh (ASAUB)

Prepared By:
Md. Mahfujul Haque ID: 071-12-320 Program: BBA

Date of Submission: 27-07-2010

Executive Summary:
Budget is the most significant aspect of a country. To achieve self sufficiency in food in Bangladesh by the year 2012. Rural development including rural infrastructure, rural electrification, rural housing, using land and water resources and development of rural small and medium enterprises. The food security along with accelerated economic growth can be achieved by developing the rural economy. Setting up the fiscal targets and the level of expenditures compatible with these targets. This is the objective of preparing the macro-economic framework. Formulating expenditure policies. Allocating resources in conformity with both policies and fiscal targets. This is the main objective of the core processes of budget preparation

Introduction:
Generally the term 'budget' implies the detailed plan of annual income and expenditure of the Government. However, the concept of national budget is not merely limited to the accounts of income and expenditure; rather it is a vehicle for implementation of the economic, social and political will of the Government. As a Government responsive to the peoples' hopes and expectations, the present Government intends to use the national budget as a tool for accomplishing the expectations and desires of the people. To achieve this target, the Government is committed to make necessary reforms in the existing budget management system. A budget is a financial document used to project future income and expenses. The budgeting process may be carried out by individuals or by companies to estimate whether the person or company can continue to operate with its projected income and expenses. The national budget of 1010-1011 is the 40th budget in the histry of Bangladesh. Once when the bangles has more rice and fill of fish in their pond then Bangladesh was renouned the golden fiber of Bangladesh. But today we need

to foreign aid to make a national budget. A budget may be prepared simply using paper and pencil, or on computer using a spreadsheet program like Excel, or with a financial application. The United Nations identified underdeveloped countries of the world as Least Developed Countries (LDC) and focused on socio economic development of those countries. Bangladesh was identified as one of such countries in 1975. These countries have a large number of poor living on less than a dollar a day. In these countries the quality of education and health condition is poor, and the industrial sector is very thin. As one would expect, their annual per capita income is at most 750 US dollars. Currently there are 50 least developed countries. World Bank has also classified countries based on economic progress. According to that classification, countries with per capita income of USD 10,725 are High Income Countries and countries with per capita income of less than USD 785 are Low Income Countries. Bangladesh economy failed to gather momentum until 1990. Average growth rate during this time was stagnant at less than 4 percent per year. In the 1990s, economic growth began to gather momentum after restoration of democracy. Since 199697 the growth rate did not fall below a decent 5 percent. In the new millennium Bangladesh achieved growth rate of 6 percent. Growth rate, however, has become sluggish again. The growth rate is also on the decline due to impact of the global economic downturn. Lack of investment in infrastructure, especially energy and power, port and communication has been identified as root cause behind sluggish growth. In order to achieve 810 percent growth, rate of investment needs to increase from 2425 percent of GDP to 3540 percent of GDP. A lot of resources are required to raise rate of investment to 3540 percent of GDP. It is challenging for the government to arrange such huge resources. Moreover, due to current global economic downturn, the prospect of receiving foreign assistance has diminished. Resource mobilization is not the only challenge for the government. It is also imperative to ascertain whether the government has

skilled manpower and required institutional framework to implement mega infrastructure projects.

Objectives: The objective of FY 2010-2011 budget is to fight off the adverse impact of the global economic crisis on Bangladesh economy and to move forward with the governments Charter for Change. To achieve self sufficiency in food in Bangladesh by the year 2012. Rural development including rural infrastructure, rural electrification, rural housing, using land and water resources and development of rural small and medium enterprises. The food security along with accelerated economic growth can be achieved by developing the rural economy. To keep fertilizer prices within the reach of the farmers however they can easily utilize it. By showing this agro-input card, farmers are now able to open a bank account with only Tk 10. By utilizing this card. The fertilizers and other agricultural programs to reduce the cost of production in agricultural sector. So the the government will subsidy in agriculture sector.

The government made an allocation of Tk. 185.21 crore for agricultural research in the last budget to develop high yielding varieties of crops and improved methods of production. In this budget they take a step Agriculture Insurance scheme to provide the small and medium farmers with crop price support in the event of crop failure due to natural disasters. Setting up the fiscal targets and the level of expenditures compatible with these targets. This is the objective of preparing the macro-economic framework. Formulating expenditure policies. Allocating resources in conformity with both policies and fiscal targets. This is the main objective of the core processes of budget preparation. Addressing operational efficiency and performance issues there may be revenue shortfall and at the same time there will be tremendous pressure on the expenditure side. While the government has to arrange resources for creating employment, ensuring food and social security, development of agriculture and rural sector, alleviating energy and power shortage, and reviving the export sector; there will be demand for increased investment for creating digital Bangladesh. Under these circumstances, government wants momentum in revenue collection as well as success in delivering public goods and services by acquiring resources from sources other than government savings. Of the other sources, government would like to encourage and facilitate private investment and foreign resources. Government is taking steps to fight off the recession, looking for new sources to Enhance revenue generation, taking initiatives to increase foreign assistance, and have formulated the PPP budget as a new alternative. Methodology:

Result and Discussion: In the national budget of 2010-2011, the finance minister can well afford to inject stimulus in the export sector, widen social safety nets and even award the black money holders, who weathered the 1/11 storms, a three-year new lease of life. But the budget briefcase that he showcased before the nation on June 11 appears a little dried up when it comes to the point of supporting our economic lifeline the farm sector. The budget has been prepared considering the price adjustment issues of fertilizer and petroleum, The percentage of budget in agriculture sector is 5.4 crore . Mirza Aziz said although he did not specify the time and amount of prices to be adjusted.

The government proposed Tk 5.4 crore for agriculture, Tk 3,688 crore for fertilizer, Tk 57 crore for electricity, Tk 540 crore for diesel, Tk 6,106 crore for fuel, Tk 834 crore for gas and power, Tk 1,318 crore for food, Tk 1,050 crore for export and Tk 55 crore for others. On the other hand the budget in agriculture sector is decreasing day by day, here I mean in FY 2008-2009 the percentage was 11 and 2009-2010 the percentage was 9.7. but running budget is also lower then the others. So if the budget in the agriculture sector is decreasing then it will not be beneficial for this sector to develop. When the finance minister earmarked Tk.5,965 crore altogether as both development and non-development budget for the agriculture ministry, which is significantly less than what the sectors budget was in the last fiscal, someone should have whispered in his ears that for the first time in recent years the country was going to boast a foodgrains output well surpassing the domestic demands. Buoyed by last years high market prices, subsidized fertilizers, and with zeal to recoup Sidr and other calamity-induced crop losses, farmers reaped a bumper boro this season. By conservative estimations, rice production will stand at 32.1 million MT by the time the country enters the 2009-10 fiscal, up

more than 8.12% from a year ago. This will be more than the countrys total estimated demand for 30 million MT. But, just because the budgetary allocation in the farm sector has marked a downturn, should we instantly conclude that its not a farm-wise budget this time around? If we do so, it will be over-simplification of the ground realities here, specially when the agriculture minister, in a post-budget press briefing, assured the nation of a prime ministerial commitment to allocate more in the farm sector, if necessary. Whatever amount is allocated for the farm sector, success in farm growth will largely depend on ensuring quality and efficiency in implementing the plans/programs to be undertaken. In the outgoing fiscal, the government heavily subsidised (Tk.5,785 crore) agro-inputs, but this time it lowered the allocation to Tk.3,600 crore as the finance minister said in his budget speech that prices of chemical fertilisers have marked a steep fall, down to one-third of 2008-level, in the international market. Against that argument, decreased allocation sounds logical. If the outgoing fiscals agro-budget was something to do with giving generous input subsidy to the farmers, this time it has to be ensuring fair prices to them so that any dampening effect in terms of price-fall does not affect them. One way to ensure this is to increase public procurement of grains from the growers at premium prices, raise the governments food storage capacity and make best use of stored grains by timely and efficient channeling of the same into various food-aided development programs, thereby employing the rural poor. One good thing about this years proposed farm budget is that it has got all the guiding principles and allocations head in that direction. The promise is there to significantly raise the procurement target to 1.6 million MT, 0.4 million MT up from 08-09 fiscal, increase the food-security threshold level of grain storage in public granaries to 1.4 million MT, a significant rise from 0.8 to 1 million MT previously.

At the same time, the government spelt out plans to build a few more food godowns and repair the dilapidated ones. In his budget speech, the finance minister acknowledges that because of negligence towards maintenance and expansion of food godowns over the past two decades, our food storage capacity remains insufficient compared with our requirement. It is interesting that the last two decades also include the 1997-2001 period when Awami League was in power. Its encouraging to see that in 2009-10 the government will allocate 0.4 million MT grains under test relief (TR), 0.55 million MT under vulnerable group feeding (VGF), 0.37 million MT under food for work (FFW) and 0.26 million MT under vulnerable group development (VGD). If those are properly utilised under various food-aided projects it is bound to create a lot of economic and development activities and generate seasonal employments for many rural poor. Ours is an agrarian economy with the farm sector contributing almost onefourth of GDP to the economy, and nearly half of our labour force is engaged in this sector. To ensure food security we need to sustain the level of food selfsufficiency that we had achieved in 1999-2000. To attain this, we need to give more money to the finance-strapped farmers. The finance minister proposed Tk.10,000 crore farm credit as target for 2009-10, a modest rise from outgoing fiscals target of Tk.9,379 crore. To gain maximum results from such increased volume of farm credit allocation, we need to, however, ensure that graft doesnt eat up a significant share. Allocation of Tk.185.21 crore for research in agriculture should be treated as a step in the right direction, but it is not enough for significant research and development in the farm sector where cutting-edge neo-technologies are coming in and we have to use agricultural biotechnology to augment farm productions. To increase crop production in 09-10 fiscal, the government proposed Tk.280 crore for developing high yielding seeds, and plans to increase the seed storage capacity from 40,000 MT to 1 lakh MT. The government-supplied

seeds apart, weve to ensure the quality of the ones being marketed by the private seed growers and importers, which often deprive farmers of better grains. Apart from gaining support from its own budget, the agro-sector will definitely be benefited by the governments huge allocation in the water resource sector. For instance, the governments plan of bringing in 15,000 hectares of land under irrigation facility by making 40,000 hectares of land flood-free shows bright prospects for the farm sector. Besides, it also proposes to excavate 40 km and re-excavate 65 km of irrigation canals, and construct 15 and repair 50 irrigation infrastructures. These steps will pay dividends for farm sector. While the government lowered the budget for the crop sector, it, however, raised budgetary allocation for the fisheries and livestock sector by 19% at Tk.716 crore in 2009-10. It unveiled plan for providing incentives to 12,000 farmers for increasing milk and meat production. Here, the government must take into serious cognizance the disincentive factors that forced the homegrown milk producers to pour hundreds of gallons of milk on the streets in protest against falling prices. Only allocating budget wont do it all, policy support is vital. An allocation of Tk. 185.21 crore for agricultural research in the last budget to develop high yielding varieties of crops and improved methods of production. This allocation is being spent on agricultural research for developing high yielding as well as salinity and flood tolerant varieties of paddy. We are going to operationalize the already created Agricultural Research Fund from the next year. The size of the fund now stands at Tk. 412 crore. Research proposals have been invited in order to utilize allocations made under the Endowment Fund for enhancing agricultural productivity through crop diversification.

An allocation of Tk. 427 crore in the last year's budget with a plan to expand irrigation facilities in the southern part of Bangladesh by utilizing surface water, mitigating water logging problems in the south-west region and widening the area of cultivable land and facilitating multi-crop production through draining out water in Haor areas. To achieve these, implementation of 66 programs at an estimated cost of Tk. 379 crore is going on speedily. As a part of our future plan for agriculture sector. Concluding remarks: Main focus of the budget appeared to be fiscal consolidation while carrying out reforms at a moderate pace. The budget also touched upon the issues of oil prices and fertilizer subsidies with the approval of nutrient based subsidy. On the whole, the budget suggests a moderate approach towards economic reforms with a focus on fiscal consolidation. The increasing agricultural production and to develop the agricultural sector as a whole, we are following National Agricultural Policy, National Agricultural Extension Policy, National Seed Policy, Integrated Fertilizer Distribution Policy and Integrated Pests Management Policy. We are working on the formulation of the National Agricultural Policy 2010 by modifying National Agricultural Policy of 1999. Conclusion: