Tk 32 bn incentive packages

Five fresh stimulus packages amounting to Taka 32 billion announced by the Prime Minister on Tuesday is expected to bring relief to millions of low-income people in country whose lives and livelihoods are at stake because of the Covid-19 pandemic and the resultant countrywide lockdowns the government had to enforce. The just declared bailout package is consistent with the government’s policy regarding the pandemic and its economic fallouts. The Prime Minister’s early awakening to the problems and prompt actions in the form of stimulus packages have helped the country avert an economic disaster. Indeed the country’s economy fared relatively well, boosted by 23 stimulus packages of Tk 124,053 crore.
A combination of luck and lockdowns at regular intervals meant that Bangladesh fortunately escaped the devastating scenarios that were witnessed in the United States, parts of Europe and India. However, this time, with the spread of the Delta variant, the fear that mass infections will cripple communities and healthcare infrastructure is frighteningly real. And it is well known that it is becoming increasing the difficult trike the perfect balance between saving lives and ensuring economic security. The virus poses a risk to human lives but many people are still in denial also because containment measures threaten their livelihood. Reliable studies have revealed that a huge number of people have fallen beyond the poverty line due to the fallouts of the pandemic which began in March 2020. There is no denying the fact that the lower income segment of the economy fell behind in taking advantage of previous stimulus packages.
A study carried out by South Asian Network on Economic Modelling (SANEM) stated that people living below the poverty line increased to 42 percent during the lockdown period compared to 2018. Over half of them were from the people private service sector. Another report published by the Centre for Policy Dialogue (CPD) in February this year says that though more than a year has passed since the Covid-19 outbreak, little sign of recovery of micro and small-scale enterprises can be seen so far. We have seen in the past that almost all social safety programmes including the previous stimulus packages were well intentioned but could not be implemented in their totality due to inertia of bureaucrats and bankers. The government has to ensure that the truly needy and vulnerable people are identified correctly and the support actually reaches them if it wants its latest financial aid initiative to be successful. If the people entitled cannot avail the benefits of bailout packages the whole purpose of the exercise will be stifled. It is important to note that only fund allocation is not enough to ensure the desired results. We also want to emphasise that cash and food relief may provide immediate relief to the low-income people the authorities should try their best to devise action programmes that will create income generating activities for these people. In the latest package Tk 1,500 crore is allocated to Palli Sanchay Bank, Karmasangsthan Bank and PKSF for financing job creation activities in rural areas with the additional allocation of Tk 3,200 crore for the purpose of providing low-cost loan assistance (at four per cent interest). In addition, Tk 1,000 crore has been allocated for providing working capital loan at 4 percent interest through the banking system for the purpose of paying the salaries, allowances of the employees of hotels, motels and theme parks in the tourism sector. We urge the government to sanction the stimulus loan to hotels, motels and theme parks at zero interest, given the sector has been badly ravaged by the virus.
Strong monitoring and timely evaluation from the concerned agencies will go a long way in ensuring that the intended benefits reach the low-income people. The government’s efforts cannot be allowed to get thwarted by vested quarters.