Allocation and distribution of resources in budget not commensurate with demands of pandemic, says one CPD senior research fellow
Rehman Sobhan, chairman of the private research institute Centre for Policy Dialogue (CPD), has termed the budget debate in parliament “theatrics”.
He was speaking at a virtual discussion organized by CPD and Oxfam, an international NGO, on Thursday, reports Bangla Tribune.
“Budget discussion was basically theatrics. Members of parliament talked about projects in their areas. One of them spoke while wearing a placard around his neck. It is pointless to give an average of 10 minutes for an MP in budget discussions,” Rehman Sobhan said.
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Speakers at the meeting, titled “Social Protection and Employment in Budget FY2021-22: Was the Focus Adequate?”, called for urgent enhancement of cash transfers to the marginalized and affected households in light of the Covid-19 pandemic, as reported by UNB.
They said there is a need for a transparent and clear reporting of stimulus packages for FY2022.
The speakers hoped that the policymakers will undertake mid-course revisions in resource allocation for the FY2022 budget, particularly by taking into cognizance the ongoing second wave of the pandemic.
Higher coverage and budgetary allocation are required for SSNPs in the form of cash transfer and households urgently need to withstand the immediate loss of income and reduced expenditure, said the speakers.
They said cash transfer should be seen as an effective tool for supporting the needy and triggering supply-side response in the economy.
Higher consumption expenditure will also help boost domestic demand and create opportunities for employment, said the discussants.
‘Allocation not commensurate with demands’
In his keynote presentation, Towfiqul Islam Khan, senior research fellow at CPD, said allocation and distribution of resources in FY2022 budget, particularly in the area of social protection, have not been commensurate with demands of the pandemic.
He said budget FY2022 should have been informed by concerns and lessons arising from the Covid-19 situation.
However, as analyses reveals, without three particular social protection programs (viz pension for retired government employees, savings certificate interest assistance and agricultural subsidy), allocation for social protection in the FY2022 budget increased by only Tk1,878 crore, said Towfiqul.
“This indicates that allocation for social protection grew by a mere 2.9% in a pandemic year, if the aforesaid three programs are excluded. There are concerns regarding the inclusion of these three programs within the social protection budget,” he said.
Professor Ali Ashraf, MP, former deputy speaker of parliament and chairman of the Parliamentary Standing Committee on Government Assurances, and Rashed Khan Menon, MP, chairman of the Parliamentary Standing Committee on the Ministry of Social Welfare, were present as guests of honour at the dialogue.
Prof Ashraf stressed the need for expanding the tax net, which would allow higher government expenditure in vital sectors like social protection.
Menon said the “new poor” have been left out in the budget. He also highlighted that the budget formulation process needs to be more participatory through discussions with various stakeholders before preparing the budget.
Dr Laila Ashrafun, head of the Department of Sociology of Shahjalal University of Science and Technology, pointed out that the true requirement of social protection is not fully known due to the lack of dialogue with stakeholders.
Adding to this, Dr Manisha Chakraborty, member secretary of Bangladesh Samajtantrik Dal’s Barisal committee, stated that the budget should be formulated by incorporating the voices of people.
Commenting on the reduction of corporate tax, Shams Mahmud, former president of Dhaka Chamber of Commerce and Industry opined that such initiatives should have been linked with job retention and creation by businesses.
Ashekur Rahman, assistant resident representative of the United Nations Development Programme (UNDP) highlighted how the budget lacked initiatives to address the challenges to the “new poor”.
CPD Distinguished Fellow Dr Debapriya Bhattacharya, who chaired the meeting, 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.
Need for data, participatory budget formulation
Presenting a summary of the discussion session, Prof Mustafizur Rahman, distinguished fellow at CPD, said poverty is a multidimensional problem, thus, it should be dealt with accordingly.
He reiterated the need for data and a participatory budget formulation.
Dr Fahmida Khatun, executive director of CPD, and Dr Dipankar Datta, country director of Oxfam Bangladesh, shared their views at the dialogue.
The speakers said investment in labour-intensive rural roads and infrastructure would be beneficial to stimulate the rural economy.
They said funds to combat the outbreak of Covid-19 (Tk7,300 crore) and funds to deal with economic and natural shocks (Tk5,000 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.