Taxes are the most important source of internal resource generation of a poor developing country such as Bangladesh. It plays a key role in realising the twin objectives of growth and equity of the developing economies. Hence the importance of tax policy. Divergence of effective taxes from nominal or statutory tax rates may be used as an indicator of discrepancy between the objective of a tax policy and its ultimate consequence. In this paper effective tax rates for indirect taxes in Bangladesh were estimated by using an economy-wide input-output table. It was found that the nominal indirect tax rates diverge substantially from the effective tax rates on various goods and services in Bangladesh.

The objectives of this paper are to present a summary and critique of the technical framework of the Third Five Year Plan of Bangladesh economy prepared by the economists from Netherlands using the applied general equilibrium approach. There were no explicit optimising criteria excepting that equilibrium between demand and supply was maintained at each point of time or with different simulations attempted by Dr M Keyzer. A model which can possibly permit short-run disequilibria around a long-run equilibrium (in year 2000) will be perhaps more attractive and realistic to planners and such a model can be a planning model with conflicting objectives like growth versus equity.

The paper sets itself the task of testing the validity of the proposition that foreign aid inhibits domestic resource mobilisation and thus perpetuates the external dependence of Bangladesh. Both long run and short run analyses of the relationship between aid and domestic resource mobilisation have been carried out for the purpose. Short run aggregate analysis, done with the help of multiple regression method, reveals that aid has an overall negative effect on internal resource mobilisation. Differentiated analysis however reveals that individual components of saving behave differently, both in magnitude and direction, in relation to aid inflow. Customs duty on aided import and private monetised saving happen to be the chief contributors to the above mentioned negative impact. Short run and long run effects of aid inflow may not have the same impact for particular elements of domestic saving. A favourable movement of some of those elements, which happen to be dependence reducing in the long run, has been identified. But no conclusive remark can be made on the basis of the finding because some vital elements could not be captured in the analysis. It has been argued in the conclusion that-achievement of self reliance is a multidimensional problem, capturing economic, social and political aspects of the country.

It is argued that Grameen Bank, through its credit programme, does not only raise the level of income of the rural poor, but also turn the income distribution in their favour. Also it strives to channelize the incremental income into productive off-farm investment. As a result the initial growth of income is sustained. Moreover, the credit operations make substantial impact on the standard of living via expenditures on clothing, health, nutrition, education and housing. However, there still remains an undercurrent of apprehensions of sustainability of a programme like this arising out of demand constraints. The present study indicates that most products originating from GB financed activities have high income elasticity of demand and reasonably high marginal budget shares. The results however need to be interpreted carefully considering competition from closed substitutes. Finally any policy suggestion must be based on a comprehensive review of constraints operating not only in the demand side, the supply side should also get equal importance.