Expectations from budget
This year's national budget will be the second to be implemented amid the ongoing unprecedented monetary and social crisis brought on by Covid-19.
One expectation is that the budget document will acknowledge the existing context and realities.
The coronavirus pandemic has resulted in an unprecedented rise in the country's poverty rate within a brief period. The financial crisis in addition has disrupted the labour market.
In this context, the social safety net programmes are considerably more important than ever. However, actually amid the pandemic, severe loopholes have been observed in these programmes.
There are allegations that a significant part of the funds for the social back-up has gone into the hands of non-poor persons because of errors in identifying the beneficiaries.
Due to this fact, poor persons and other targeted organizations have remained deprived. While regional administrative officials and government representatives prepare the set of beneficiaries, no mechanism is in spot to assure accountability and transparency in the whole process.
This faulty system results in a sizable section of the indegent being overlooked of the purview of the social back-up or relief distribution programmes. Therefore, there is a need for good coordination among ministries in this respect.
Also, all back-up programmes must be brought underneath one platform. As the allocation for these programmes should be doubled at the least, there can be a need for making sure coordination, accountability and transparency in the entire device of allocation, distribution and supervision.
Various sectors throughout the market and different parts of the population have been damaged to different degrees through the pandemic. Despite that, there's hardly been any obvious move by government organizations to determine such impacts.
However, the current context necessitates a better understanding of the economic and social impacts of Covid-19. Needless to say that it is extremely hard to undertake the necessary policies and activities without updated data, facts and an improved understanding of the ground realities.
The South Asian Network on Economic Modeling's quarterly surveys on 500 firms from 15 production and service sectors since June 2020 reveal that a lot of micro and smaller businesses, who play an essential part in the supply chain in the economy, have already been struggling to survive.
This resulted in a huge disruption in the supply chain, which will continue to hinder economic recovery despite the fact that remittance and export earnings have been showing an upward trend.
Since a lot more than 85 % of job is in the informal sector, a sizable part which are micro and smaller businesses, the overall market will not recover unless these lenders are restored.
Micro and smaller businesses are also the lowest beneficiaries of the stimulus plans. Therefore, you will find a have to place particular focus on these lenders in the cover 2021-22 to be able to establish a mechanism that could help them get over the present condition.
There is now a discussion in the opportunity of a second set of stimulus packages but simultaneously, there is a have to review the experience of the stimulus plans disbursed so far.
Valid concerns is there about the management and monitoring of the stimulus plans. Gleam want to take the steps needed to help make the stimulus deals more effective.
An important point related to the economic restoration is that unless the federal government can contain the ongoing wellness crisis through mass vaccination and enforcement of regulations, recovery will never be sustainable.
The countrywide budget should prioritise the allocation of resources, mechanisms for coordination among relevant agencies, the necessary roadmap, and their execution.
As around 80 % of the country's total investment comes from the personal sector, stimulating private investment is crucial for economic recovery. As the official figures on private investment amid Covid-19 are however to arrive, the indicators linked to private sector expenditure show a very alarming picture.
Depressing styles of imports and exports and the personal sector credit growth will be testimony to the picture. The cover fiscal 2021-22 gets the prime task to show means of overcoming stagnation in individual sector investment.
There are also expectations over if the government will show any direction in undertaking most long-standing critical reforms in taxation, financial sector, health insurance and education.
The health sector, without doubt, requires considerable overhauling. Although the sector's allocation increased drastically in the last budget, medical ministry's weak capacity resulted in much of the resources being unutilised. At the same time, medical sector has been alleged to be influenced by corruption and different irregularities.
So, there should be techniques in the budget about how the health ministry will spend methods more efficiently in the coming times.
The federal government alone cannot address the economic and social crisis induced by Covid-19. Even so, the government must bring the exclusive sector and its own associations, NGOs, volunteer organisations, and people's representatives under coordinated initiatives.
The budget should specify a roadmap for the Covid-19 recovery plan and how numerous stakeholders could play their roles beneath the overall leadership of the government.
The writer is a professor of economics at Dhaka University, and executive director of South Asian Network on Economic Modeling. He could be reached at selim.raihan@gmail.com.
