Budget offers little to tackle Covid-induced challenges: CPD

Niaz Mahmud

The Centre for Policy Dialogue has noted that the proposed budget offers little in terms of concrete measures and innovative policies to combat pandemic-induced challenges.

Finance Minister AHM Mustafa Kamal placed a Tk 6,03,681 crore proposed budget for 2021-22 fiscal year in parliament on Thursday. He said that health, agriculture and employment generation have been prioritised while allocating resources for Annual Development Programme.

“The actual allocation does not reflect this and these promises are not supported by adequate resources,” CPD Executive Director Fahmida Khatun said in her keynote presentation at a press conference – An Analysis of the National Budget for FY2021-22 – in the capital.

She said that they emphasised mid-term strategy for economic recovery but the proposed budget does not clearly spell out anything on this. “It is putting at risk the fulfillment of the promise made in the 50th budget to move towards a resilient future by giving priority to lives and livelihoods,” Fahmida said.

CPD Distinguished Fellow Prof Mustafizur Rahman, Research Director Khondaker Golam Moazzem and its Senior Research Fellow Towfiqul Islam Khan also spoke at the event.

Mustafizur said that allocations to the education and health sectors did not increase. The budget does not mention anything about the new poor created during the pandemic period.

He recommended increasing allocations for health, education and social safety net to address challenges posed by the pandemic.

Moazzem suggested raising the stimulus package to Tk 50,000 crore for the cottage, micro, small and medium enterprises.

“Only tax rebate would not be enough for the CMSMEs as they are going through working capital shortage. If they get funds at low rate, they will be able to move for production in full-swing,” he said.

The independent think-tank also said that the macroeconomic framework of the budget is far from reality. It takes the revised budget targets, which are unlikely to be achieved, as reference points and assumes that most of the macroeconomic correlates would perform better than the targets set in the eighth fifth-year plan.

Fahmid said that there is a section on reforms in the budget document but it only refers to what have been done so far. “It does not spell out what concrete reforms would be undertaken to improve the efficiency in the economy,” she said.

The unfinished reform agenda in many areas such as tax, customs duty, banking sector, health sector and social sector has constrained the achievement of budgetary targets and its ability to cope with adverse impacts of the pandemic, she noted.

The CPD said that the proposed budget does not seem to recognise the implementation challenges and spell out ways to overcome those challenges.