CPD, Oxfam calls for urgent cash transfers to Covid-hit households

Speakers at a virtual dialogue have called for urgent cash transfers to marginalised households which have been affected by the Covid-19 pandemic.

Households urgently need to withstand the immediate loss of income and reduced expenditure. Cash transfer should be seen as an effective tool for supporting the needy and triggering supply-side response in the economy, the speakers said while addressing a national dialogue on “Social Protection and Employment in Budget FY2021-22: Was the focus adequate?”

The speakers also pressed hope that policymakers will undertake mid-course revisions in resource allocation for the FY2022 budget, particularly by taking cognisance of the ongoing second wave of the pandemic, said a press release on Thursday.

The virtual dialogue was organised by the Centre for Policy Dialogue (CPD) and Oxfam in Bangladesh in association with the Citizen’s Platform for SDGs, Bangladesh.

The event was chaired by CPD Distinguished Fellow Dr Debapriya Bhattacharya, also the convenor of Citizen’s Platform for SDGs.

“Allocation and distribution of resources in FY2022 budget, particularly in the area of social protection, have not been commensurate with demands of Covid times. Budget FY2022 should have been informed by concerns and lessons arising from the Covid-19 pandemic,” CPD Senior Research Fellow Towfiqul Islam Khan said while presenting his keynote paper at the discussion.

However, as the analysis reveals, without three particular social protection programmes (namely pension for retired government employees; savings certificate interest assistance; and agricultural subsidy) allocation for social protection in the FY2022 budget had increased by only Tk 1,878 crore, he added.

“This indicates that allocation for social protection grew by a mere 2.9 per cent in a pandemic year, if the aforesaid three programmes are excluded. There are concerns as regards the inclusion of these three programmes within the social protection budget.”

Two programmes, they said, funds to combat the outbreak of the coronavirus pandemic, which is of Tk 7,300 crore, and funds to deal with economic and natural shocks of Tk 5,000 crore at the margin, will determine the effectiveness of the social protection budget – details on these will be required at the earliest.

They said more importance should be given to extending support through NGOs and microfinance institutions.

“There is a need to enhance coverage of credit guarantee scheme,” the release said.

Addressing the discussion, CPD Chairman Professor Rehman Sobhan re-emphasised on how social protection allocation figures would be very low if social protection was re-categorised as per the recommendations from the dialogue.

Professor Ali Ashraf, chairman of the Parliamentary Standing Committee on Government Assurances, stressed on the need for expanding the tax net which would allow higher government expenditure in vital sectors like social protection.

Regarding the reduction of corporate tax, Dhaka Chamber of Commerce & Industry (DCCI) former president Shams Mahmud said such initiatives should have been linked with job retention and creation by businesses.

United Nations Development Programme (UNDP) Assistant Resident Representative Ashekur Rahman highlighted how the budget lacked initiatives to address the challenges to the ‘new poor’.

Dr Debapriya said the social protection allocation seems higher because of the inclusion of various elements like pension. He also stated that allocations for social protection are not made as per vulnerability and these allocations oftentimes do not reach the right person.

Presenting a summary of the discussion session, CPD Distinguished Fellow Professor Mustafizur Rahman said that poverty is a multidimensional problem, thus, it should be dealt with accordingly.

The speakers said investment in labour-intensive rural roads and infrastructure would be beneficial to stimulate the rural economy.

Higher consumption expenditure will also help to boost domestic demand and create opportunities for employment, they added.

Apart from that, the discussants also underscored for the need of a transparent and clear reporting mechanism for stimulus packages announced for FY2022.