The Financial Express

A budget in the time of Covid-19 pandemic  

Published: June 15, 2020 22:59:25 | Updated: June 17, 2020 21:38:01

A budget in the time of Covid-19 pandemic   

Covid-19 pandemic has triggered once-in-a-century global crisis. It is more than a public health emergency; it has also disrupted international and domestic supply chains. Many believe this is not the time to chase any ambitious GDP (gross domestic product) growth target. Chinese Premier Li Keqiang presented  the government work report in the National People's Congress in Beijing on May 22, 2020 without setting "a specific annual economic growth target for 2020".  The Chinese leadership has apparently shown pragmatism by recognising "the uncertainties and immense difficulties caused by the coronavirus epidemic and the global economic recession". In the Western world, governments, in general, with the possible exception of the United States, observe restraint in projecting ambitious GDP growth rates. They are primarily concerned with protection of life and livelihoods at the moment; then comes recovery paving the way to growth.

But here in Bangladesh, the finance minister seems to assume a "V" shape recovery of the economy of the country from the raging Covid-19 crisis. While concern is there for life and livelihoods as well as recovery, his priority appears to be growth. He has projected 8.2 per cent GDP growth rate for FY 2020-21 in his budget speech at the Jatiya Sangsad on Thursday (June 11). He has invoked the Spirit of '71 and drawn inspiration from divine guidance and concluded his budget speech with the rousing exhortation: "Surely the Almighty will give us shelter under the cool shade of His bountiful mercy and relieve all of us from the scourge of this pandemic. We will return to our normal lives. There will be a new dawn on the horizon piercing the veil of darkness all around us." This is a leap of faith which is not up for debate on mundane economic calculation based on data.

The proposed budget for FY21 is a routine budgeting exercise based on orthodox growth theories. Insofar as response to the Covid-19 emergency is concerned the proposed budget has rehearsed the stimulus packages announced by the prime minister for various sectors. This formalisation as budgetary allocation is necessary to spend money from the national exchequer. The stimulus packages and video conferencing of the Prime Minister from time to time addressing the twin issues of proper utilisation of the largesse of the stimulus packages and implementation of relevant emergency directives actually stand for Covid-19 budget of the country. These have already been critiqued by experts, professional bodies, political parties and the people at large as the prime minister's announcements.

A traditional review of the structure of the budget and its other details is, of course, necessary. But what is of paramount importance is a fresh round of wide-ranging discussion in parliament and public forums on the stimulus packages as a part of the budget, particularly how these are utilised and reach the actual recipients in a pervasive informal economy.

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