The government has ‘mostly opted for a business as usual budget’ rather than innovation for the crisis management, the Center for Policy Dialogue says in a post-budget analysis.
“Covid-19 induced health, economic, humanitarian and social crises are unprecedented, and the budget for FY21 needed to be more innovative to address this multidimensional crisis,” Dr Fahmida Khatun, Executive Director of the private think tank, said in a virtual briefing.
Finance Minister AHM Mustafa Kamal on Thursday proposed a Tk5.68 trillion outlay for 2020-21 in the parliament amid pandemic led global and national uncertainties.
He, however, said he made a slight deviation from the traditional budget for what he said “effectively” combating the deadly coronavirus and “resolutely” overcoming its economic impact.
But his 8.2 percent growth target during the time of unprecedented crisis has been regarded as laughable by the economists.
The CPD in its analysis said the government appears to have prepared the budget “under the assumption that the fallout from Covid-19 will be managed in a very short period, and the economy will bounce back in FY21”.
“However, Covid-19 situation is an evolving one; there are significant uncertainties regarding its duration and extent of impact”.
CPD, in its budget recommendations, had urged to give priority to four sectors health, social safety net, agriculture, and employment generation.
“The government has rightly put emphasis on these sectors. However, its promises and priorities have not been translated into actions through innovative approaches and allocation of adequate resources,” Dr Fahmida said.
She said Covid-19 has exposed the high cost of weak implementation capacity which CPD has drawn attention to over successive budget presentations.
“Recent incidences as regards procurement and management in the health ministry itself are a stark example of this”.
“Government’s inability to undertake the much needed reforms, which it had announced earlier in FY2020 budget (e.g. direct tax, customs duty, banking commission, Shashya Bima) has constrained its ability to cope with adverse impacts of the pandemics and implementation of budgetary measures.
“Rising number of new poors, and increasing income and consumption inequality, require differentiated measures which the budget have not adequately addressed,” she said, highlighting some constraints of the budget.
“Macroeconomic framework of the budget does not reflect the realities on the ground. During a crisis such as the Covid-19 pandemic the main objective should be supporting the poor and affected people, instead of being too much concerned with GDP growth.
“Several countries have been facing negative growth which is natural during a pandemic. The focus should be on coping, adjustment and mitigation with a view to subsequently get on the recovery track.
“A realistic estimate on our economic performance is also necessary because Bangladesh needs to access Covid-19 related funds from international organisations, particularly when the government is expecting to underwrite a large part of the budget deficit from foreign borrowing.
“In view of the evolving Covid-19 scenario the government should be ready, if required, to revisit the budget and undertake necessary corrective measures in view of realities on the ground,” the CPD said.
