The government should take the budget as a dynamic document and they should revise their priorities after two months instead of waiting for 6-7 months
The Centre for Policy Dialogue (CPD) on Saturday in a budget dialogue urged the government to revisit budget priorities after two months to take corrective action, as the Covid-19 pandemic does not appear to be leaving anytime soon.
Since the contagion of coronavirus is on the rise, the crisis is growing. The government should take the budget as a dynamic document and they should revise their priorities after two months instead of waiting for 6-7 months.
Covid impacts on the economy and health sector were not properly reflected in the proposed budget. Later, there might be a more concrete picture in the budget for the health sector with reform initiatives, said CPD distinguished fellow Prof Mostafizur Rahman.
"We do not know how long the Covid pandemic will remain and so we must take the risks into consideration on the basis of the present situation and our urgency to fight. The government has to revisit the budget after two months instead of waiting for 6-7 months for revision," said the economist.
Based on the intensity of Covid and emergency needs of the time, the government has to take a mid course of corrective actions, he added.
Business leaders also supported the call for revising budgetary measures for a better recovery of the economy as well as proper implementation.
“There are too many unknowns currently in global economic recovery due to the devastation left by Covid. The budget has to be reviewed after three months,” said Nihad Kabir, president of the Metropolitan Chamber of Commerce and Industry (MCCI).
Meanwhile, the think tank also stressed on the need for quarterly monitoring of the budget and proper implementation of its allocations, especially in the health sector, to ensure treatment to save people's lives.
“Right now, the much needed issue is implementation of budget allocation and it should be recorded as to how much is executed,” said CPD chairperson Rehman Sobhan, who presided over the virtual dialogue.
In addition, we should also look at how incentive packages are being implemented and what is needed for social protection to meet the needs of people. What kind of action is being taken to resolve the social safety net program? Rehman asked.
It is necessary to monitor if the resources are adequate to fight the Covid crisis and how matters can be resolved, he added.
Also, there should be concrete targets and monitoring on the basis of the quarterly cycle. Civil society can also play an important role in monitoring how the budget is being implemented, said the eminent economist.
The budget should be a rolling budget for the July-December period, focusing on Covid-19 issues and social safety net programs. Unfortunately, it did not happen, said Policy Research Institute (PRI) Executive Director Ahsan H Mansur.
With the data available, it is not possible to forecast a full budget and as a result, the economy will not recover. It might also be impossible to retain growth, he added.
Reforms for banks, NBR absent
Economists, business people, politicians and civil society members, who took part in the budget dialogue, expressed dissatisfaction with the proposed budget. They say it does not address the issue of much-needed reforms for the banking sector and National Board of Revenue (NBR), to prop up revenue collection and bring discipline to the banking sector.
There were challenges in the economy before the Covid-19 outbreak, which intensified after the outbreak. The proposed budget was a routine one. It needs reforms, especially in the banking sector to ensure good governance, reining in soaring bad loans and stopping corruption and leakage, said former Bangladesh Bank governor Salehuddin Ahmed.
He also feared the 2% rebate for defaulters would backfire for the banking sector instead of bringing reforms.
Stressing reforms in the NBR, economists and business people called for separate administration and policymaking under the same authority.
“Every year NBR is given a revenue target, which is never reached. In the system, there is a strong need for fundamental change. Until the expected change or policy reforms happen, the pressures on good tax payers will increase,” said Nihad Kabir.
This is because of lack of capacity or research needed for realizing the target. It is time to think about whether the tax administrator will make the policy reforms or not, she added.
Meanwhile, the CPD put emphasis on modernization of the Income Tax Ordinance and called for automation to prevent tax evasion and bring more taxable people under the tax net.
CPD urged the need for broader use of technology to boost revenue mobilization efficiency and added that the introduction of an e-TDS (tax deducted at source) system will make tax evasion difficult.
Planning Minister MA Mannan, who joined the dialogue as chief guest, also agreed on the issue of reforms, terming it an ongoing process.
Accountability a must for proper budget implantation
“For the proper implementation of the budget and reaping the most benefits of allocation for the people, we have to ensure accountability in the use of funds allocated for projects or any program,” said Nahim Razzaq MP.
"To this end, we need a collective approach where civil society members and people will participate,” he added.
Supporting the call for reforms in the banking sector and NBR, the ruling party's young lawmaker also urged coming out from the traditional ways to innovative approaches for revenue generation, where the NBR can play an important role.
Hs also stressed on ensuring access to finance for SMEs
Addressing health is key issue
“Amid the Covid-19 pandemic, China did not forecast its GDP growth. It focused on job creation. We should focus on the issue which is now important and a top priority. There should be a balance and we should think about a win-win situation,” said Saber Hossain Chowdhury, president of the Inter-Parliamentary Union (IPU).
"We don't even know the rate or number of infections in June. If we cannot contain the virus, the economy will not recover," he added.
“In people's minds, two issues are very active: save lives and livelihoods. 80% of people in the informal sector have lost jobs. They need cash and food support,” said former commerce minister Amir Khosru Mahmud Chowdhury.
But the issues are not reflected in the budget. People are not getting treatment, oxygen and ICU support amid the soaring contagion of Covid, while the government is pouring funds into mega projects, said Khosru, a BNP political leader.
He urged an increased allocation for the health sector to 5% of GDP as per the recommendation of the World Health Organization.
Health investment gives returns by developing human resources, he added.
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